Prolonged Dollar Strength a `Big Drag' on Economy, BMO's Gallo Says

The transcript discusses the impact of currency fluctuations on the economy, focusing on the US dollar and China's RMB. It highlights the potential effects of a weakening dollar on US growth and examines China's strategic currency management in response to trade tensions and economic challenges. The discussion also covers China's fiscal policies and their role in supporting growth, as well as the implications of the dollar's valuation on the global economy.

What is the expected cumulative slippage in the US dollar by the end of 2018?

• 0.5 to 1 percent

• 3 to 4 percent

• 1 to 1.5 percent

• 2 to 3 percent

How does China manage its currency to offset the impact of tariffs?

• Through foreign investments

• By reducing exports

• Through engineered devaluation

• By increasing interest rates

What was a significant policy error made by China in 2015?

• Raising interest rates

• Reducing fiscal spending

• Allowing uncontrolled currency outflows

• Increasing tariffs

According to the IMF, how is the US dollar currently valued?

• Undervalued

• Moderately overvalued

• At equilibrium

• Significantly undervalued

What could be a consequence of prolonged strength in the US dollar?

• Boost in exports

• Increase in GDP

• Drag on the economy

• Rise in inflation