Uncertainty over US President Donald Trump's policies loomed over a New York Fed conference on the US dollar last week, as the White House's unconventional tariff agenda and efforts to exert control over the central bank's board have led to greater scrutiny on the world's reserve currency.
Just a stone's throw from Wall Street, the Federal Reserve Bank of New York is a major player in the global financial system. The New York Fed, which implements the monetary policy decided on by the US central bank's rate-setting committee, provides services to more than 200 account holders, including foreign central banks.
The New York Fed also serves as a global custodian of gold on behalf of the US government and foreign central banks, among other account holders. The gold vault, situated about 25 metres below the building in Manhattan's financial district, stores roughly 507,000 gold bars, which had a combined weight of 6,331 tonnes as of 2024.
The US dollar plays a critical role in shaping global investment goals because of its status as the world's financial currency and because of foreign investment into the US.
“The sad reality is that many people across the world are at least questioning whether the institutional strengths that gave the dollar its primacy in the first place are still intact,” said Daleep Singh, a former official in president Joe Biden's administration.
A series of Mr Trump's manoeuvres this year have weighed on the dollar. The ICE dollar index, which measures the greenback against a basket of six major rivals, has fallen more than 9 per cent amid the President's wide-ranging tariff agenda and his efforts to reshape the Fed's board of governors in Washington.
So far those efforts – which include placing a top economic ally on the Fed board and seeking the removal of a governor on mortgage fraud allegations – have done little to persuade the Federal Reserve to cut rates aggressively.
Projections last week showed the Fed expects to cut interest rates by an additional 50 basis points this year after lowering rates by 25 basis points last week, which would bring the effective federal funds rate down to about 3.6 per cent by the end of this year.
That falls well short of the 3 per cent reduction Mr Trump has demanded. Only Stephen Miran, a newly confirmed Fed governor and a top economic ally of the President, has argued for steep cuts.
Mr Trump this year has frequently directed his anger at Fed Chair Jerome Powell. Tension between the two came to a head in July when Mr Trump made an near precedent-shattering visit to the Fed's headquarters after complaining over alleged cost overruns related to the central bank's renovation project.
With Mr Powell's term as Fed chair due to expire in May, Mr Trump will have an opportunity to nominate a successor more inclined to push for large rate cuts.
Mr Singh, now vice chair and chief global economist at PGIM, warned that this could lead to a “tale of two Feds” next year.
“We do worry quite a bit about … an abruptly dovish shift in the Fed's reaction function going into next year,” he said.
Most economists hold the Fed's independence as sacrosanct and argue it plays a crucial role in the global financial stability and the role of the US dollar as the world's reserve currency. That independence has endured considerable strain this year, and an expected Supreme Court ruling on the fate of embattled Fed governor Lisa Cook could have huge ramifications for the global economy.
“Confidence in a currency depends on some trustworthy institutions that stand behind it,” Jeffry Frieden, a professor at Columbia University, said during a panel session.
In the face of a politically motivated Fed, Mr Singh said other central banks would have incentive not to move in lockstep with the US, to protect their own credibility.
“So on a cyclical basis, I think the risks to the dollar are skewed to the downside,” he said.
While other major central banks including the Bank of England and European Central Bank have gone through a series of rate cuts, the Fed has operated cautiously due to the uncertain effects that Mr Trump's tariffs could have on the economy.
Fed officials thus far broadly anticipate those tariffs will lead to a one-time price increase.
The dollar index fell following the so-called Liberation Day announcement on April 2 and has fluctuated amid Mr Trump's stop-start approach. It was trading at 98.18 on Friday, a year-to-date decline of 9.5 per cent.
“That wasn't part of the script,” said Mahmood Pradhan, head of global macroeconomics at the Amundi Institute.
Growing US federal government debt is also weighing on the dollar. Last week, Bridgewater founder Ray Dalio warned excessive US government borrowing is unsustainable and the country is facing a significant fiscal crisis that will place at risk its standing in the monetary order.
Experts say there is currently no suitable rival to supplant the US dollar as the world's reserve currency.
Still it is a question that investors in Europe, Asia and the Middle East ask, Mr Pradhan said. The challenge is to understand what they are doing about it.
“And that's really the puzzle,” Mr Pradhan said.
MATCH DETAILS
Chelsea 4
Jorginho (4 pen, 71 pen), Azpilicueta (63), James (74)
Ajax 4
Abraham (2 og), Promes (20). Kepa (35 og), van de Beek (55)
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
MATCH INFO
Europa League semi-final, second leg
Atletico Madrid (1) v Arsenal (1)
Where: Wanda Metropolitano
When: Thursday, May 3
Live: On BeIN Sports HD
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
ANDROID%20VERSION%20NAMES%2C%20IN%20ORDER
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The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
Results
5pm: Reem Island – Conditions (PA) Dh80,000 (Turf) 1,600m; Winner: Farasah, Antonio Fresu (jockey), Musabah Al Muhairi
5.30pm: Sir Baniyas Island – Maiden (PA) Dh80,000 (T) 1,400m; Winner: SSR Ghazwan, Antonio Fresu, Ibrahim Al Hadhrami
6pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 1,400m; Winner: Astral Del Sol, Sean Kirrane, Ibrahim Al Hadhrami
6.30pm: Al Maryah Island – Maiden (PA) Dh80,000 (T) 2,200m; Winner: Toumadher, Dane O’Neill, Jaber Bittar
7pm: Yas Island – Handicap (PA) Dh80,000 (T) 2,200m; Winner: AF Mukhrej, Tadhg O’Shea, Ernst Oertel
7.30pm: Saadiyat Island – Handicap (TB) Dh80,000 (T) 2,400m; Winner: Celestial Spheres, Gary Sanchez, Ismail Mohammed
Ammar 808:
Maghreb United
Sofyann Ben Youssef
Glitterbeat
Results:
6.30pm: Mazrat Al Ruwayah (PA) | Group 2 | US$55,000 (Dirt) | 1,600 metres
Winner: AF Al Sajanjle, Tadhg O’Shea (jockey), Ernst Oertel (trainer)
7.05pm: Meydan Sprint (TB) | Group 2 | $250,000 (Turf) | 1,000m
Winner: Blue Point, William Buick, Charlie Appleby
7.40pm: Firebreak Stakes | Group 3 | $200,000 (D) | 1,600m
Winner: Muntazah, Jim Crowley, Doug Watson
8.15pm: Meydan Trophy Conditions (TB) | $100,000 (T) | 1,900m
Winner: Art Du Val, William Buick, Charlie Appleby
8.50pm: Balanchine Group 2 (TB) | $250,000 (T) | 1,800m
Winner: Poetic Charm, William Buick, Charlie Appleby
9.25pm: Handicap (TB) | $135,000 (D) | 1,200m
Winner: Lava Spin, Richard Mullen, Satish Seemar
10pm: Handicap (TB) | $175,000 (T) | 2,410m
Winner: Mountain Hunter, Christophe Soumillon, Saeed bin Suroor
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
The specs
Engine: 0.8-litre four cylinder
Power: 70bhp
Torque: 66Nm
Transmission: four-speed manual
Price: $1,075 new in 1967, now valued at $40,000
On sale: Models from 1966 to 1970
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Types of bank fraud
1) Phishing
Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
2) Smishing
The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
3) Vishing
The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
4) SIM swap
Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
5) Identity theft
Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
6) Prize scams
Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
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Cast: Tom Hardy, Michelle Williams, Riz Ahmed
Rating: 1.5/5
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