What Does the New U.S. Dollar Strength Signal?

The video discusses the impact of the 2013 rally and taper tantrum on emerging markets, highlighting the divergence between commodity importers and exporters. It examines the effects of a strong dollar on emerging markets and potential financial vulnerabilities. The discussion shifts to international investments, focusing on emerging market equities and their valuations. Governance in emerging markets, particularly in India and Brazil, is emphasized as crucial for reducing risk premiums. Finally, the video addresses Russia's economic challenges due to oil price fluctuations and geopolitical risks.

What was the primary cause of the 2013 rally's impact on emerging markets?

• A global economic boom

• A Fed-induced taper tantrum

• A surge in commodity prices

• A decline in US interest rates

Which countries were part of the 'fragile five' in emerging markets?

• Mexico, Argentina, Brazil, Turkey, South Africa

• China, Russia, Brazil, India, South Africa

• India, China, Brazil, Turkey, Russia

• India, Indonesia, Brazil, Turkey, South Africa

What is a potential risk for emerging markets due to the strong US dollar?

• Financial vulnerabilities due to dollar-denominated liabilities

• Higher inflation rates

• Increased commodity prices

• Improved trade balances

How are emerging market equities generally valued compared to developed market stocks?

• Consistently outperforming

• Highly volatile

• Fairly valued or cheap

• Overvalued

What is a potential value trap in emerging markets?

• Consumer-oriented stocks

• Technology stocks

• Commodity and mining stocks

• Healthcare stocks

Why is good governance important in emerging markets?

• It reduces the EM risk premium

• It increases inflation

• It leads to higher commodity prices

• It causes currency depreciation

What factor has recently affected the Russian ruble?

• Rising interest rates

• Increased foreign investment

• Drop in oil prices

• Strengthening of the euro