The US economy has a 'good chance' to see more stimulus before the presidential election, a fund manager says

• The US economy has a "good chance" of seeing another coronavirus stimulus package before the presidential elections in November, a fund manager told CNBC on Tuesday.
• If both chambers of Congress "can strike something that's reasonable on both sides, then we do have a good chance to get something done before the election, or right after, which would benefit both parties and the general economy," Michael Cuggino said.
• He expects the US dollar to continue weakening alongside an "incredibly good environment" for gold based on current market conditions.
• Negotiations on another stimulus bill have been deadlocked since early August.
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Revived discussions over a new $2.2 trillion US stimulus deal unveiled by House Democrats represents a fresh effort to "likely get something done" before the presidential election, Michael Cuggino of Permanent Portfolio Family of Funds told CNBC on Tuesday.

House leaders have not set a date for the vote yet, but Majority Leader Steny Hoyer, a Democrat from Maryland, has said it could happen this week. The US elections are now only five weeks away to the day.

"If they can strike something that's reasonable on both sides, then we do have a good chance to get something done before the election, or right after, which would benefit both parties and the general economy," Cuggino said on CNBC's "Squawk Box Asia."

He said lawmakers "need to be careful of not lumping other problems like state budget deficits, for example, that were accumulated through bad management to creep into COVID and assistance programs."

"I think that's been one of the sticking points thus far."

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Cuggino pointed out that while short-term market volatility will smooth out, there will be longer-term implications for the election results once the dust settles after the winner is confirmed. Until that happens, investors can expect headline risk and volatility risk "going in all different directions."

"We've seen multiple debates before. We've seen October surprises and the like," he said. "They haven't really resulted so much in terms of any long-term impact on the market or even shorter-term trends beyond the headline."

Cuggino expects the US dollar to continue weakening alongside an "incredibly good environment" for gold based on current market conditions.

Both chambers of Congress would need to approve the House Democrats new plan for it to reach President Donald Trump's desk for his signature. But that prospect is highly uncertain given Democrats and Republicans are deadlocked on further coronavirus relief measures.

Negotiations were interrupted earlier in August amid fierce disagreements over the amount of federal spending needed. Unemployment benefits and state aid still remain two areas of major friction between both parties.

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