Mizuho Bank's Varathan on Dollar, EM

The video discusses the strong outlook for the dollar in early 2022, driven by the Fed's hawkish stance compared to the ECB and PBOC. It highlights the economic impact of the Omicron variant and inflation, particularly on emerging markets. The analysis extends to Chinese currency dynamics, emphasizing inflation differentials and stability. The video concludes with potential policy mistakes by central banks and their global risks, especially concerning economic and currency stability.

What is the primary reason for the expected strength of the dollar in early 2022?

• Increased global risk aversion

• The PBOC's monetary policy

• The Federal Reserve's hawkish stance

• The ECB's dovish stance

Which factor is NOT mentioned as a vulnerability for emerging markets?

• Omicron variant resurgence

• Low vaccination rates

• High inflation

• Strong fiscal policies

What is a significant concern for high inflation economies as they move into 2022?

• Stable currency values

• Increased spending ability

• Fiscal fade

• Rising vaccination rates

How is the Chinese currency performing relative to the dollar despite policy differences?

• It is highly volatile

• It is holding up well

• It is weakening significantly

• It is strengthening rapidly

What could be a potential policy mistake by central banks in response to inflation risks?

• Focusing on growth

• Acting too quickly

• Ignoring inflation

• Moving too slowly