U.S. Dollar Is Oversold, Says Pictet’s Menon

The transcript discusses the recent trends in the dollar's value, highlighting its 10% drop from the market peak and the factors influencing its volatility, such as risk appetite and political events. It explores the strategic outlook on the dollar, considering the US's widening twin deficits and interest rate erosion. The discussion also covers the potential impact of the upcoming elections on the dollar, with scenarios like a divided Congress or a democratic sweep affecting its value differently. The overall market recovery and its positive effects on risk assets, especially in emerging markets, are also examined.

What has been a significant factor in the recent decline of the dollar's value?

• Decreased global trade

• Risk appetite and virus-related fears

• Increased interest rates

• Stable economic growth

What is one reason for the bearish outlook on the dollar from a strategic perspective?

• Stable inflation rates

• Strengthening of the euro

• Increase in US exports

• Widening twin deficits in the US

How might a divided Congress impact the dollar?

• It would likely strengthen the dollar

• It would probably weaken the dollar

• It would have no impact on the dollar

• It would cause the dollar to fluctuate wildly

What could a Democratic sweep potentially lead to in terms of economic policy?

• Significant stimulus or domestic investment programs

• Reduction in government spending

• Increased tariffs on imports

• Decreased focus on infrastructure

What is the potential impact of a Democratic sweep on global markets?

• It could lead to a decrease in global market activity

• It might result in increased global market volatility

• It could draw capital inwards and affect the dollar

• It would have no impact on global markets