TD's McCormick Sees Significant Dollar Decline If China Reopens

The transcript discusses the potential impact of China's reopening on the US dollar, suggesting that a shift towards relaxing COVID-19 restrictions in China could lead to a significant weakening of the dollar. The analysis indicates that the dollar is currently overvalued by 6-10% in global markets, including G10 and emerging markets. If China confirms reopening with MRA vaccines, a 10-15% drop in the dollar is forecasted for the latter half of 2023. The discussion also highlights the possibility of a 5-6% drop in the dollar in the coming months if China reopens.

What factors are considered in the risk analysis regarding the dollar's value?

What could be the expected decline in the dollar if China were to reopen?