The UK pound has been putting in a strong performance across August, as it touched a one-year high against the US dollar of $1.3054 on Tuesday.
At the same time, the British currency has been trading fairly steadily against the euro, with a euro worth around 85.37 pence.
“Currency markets are always a tricky one, both sides of every pair need to be looked at to try to understand moves,” Matt Britzman, senior equity analyst at Hargreaves Lansdown told The National.
As such, while currency trading is a stormy arena at the best of times, analysts say the weakness of the US dollar is providing a boost to both sterling and the euro at the moment, because of predictions the Federal Reserve will drop interest rates at a faster rate than had been previously forecast.
“The fact that (sterling) has moved against the US dollar this week is a function largely of the dollar weakness,” said Jane Foley, head of FX strategy at Rabobank.
Richard Hunter, head of markets at Interactive Investor agreed, adding that the pound is also benefiting from events in Britain as well.
“The ongoing resilience of the UK economy also offers some support, while the fact that the Bank of England has already moved to reduce rates reflects confidence in inflation largely having been tamed,” he told The National.
As such, the British pound has been the best-performing currency in the G10 group of nations so far this year, having risen about 2.3 per cent against the dollar.
Recent economic data has been relatively positive for the UK economy, with second-quarter growth increasing by 0.6 per cent, as last year's brief recession was well and truly placed in the rear-view mirror.
In addition, the new Labour government in the UK, which took over at the beginning of July, appears to have brought a sense of stability to the London markets for the time being.
Meanwhile, weaker-than-expected US non-farm payroll numbers released this month sparked a sell-off in global stocks and a corresponding rally in bonds as investors fretted that the US economy could be heading for a hard landing and a possible recession.
Interest rate divergence
All market eyes are now turning to the annual meeting of central bankers at Jackson Hole in Wyoming for further clues on the short-term future for US interest rates and corresponding movements in the dollar.
Bank of England governor Andrew Bailey is due to speak at Jackson Hole later on Thursday, with Fed chair Jerome Powell's speech scheduled for Friday.
“The future direction of currencies is extremely difficult to pin down, given the highly unpredictable macroeconomic trends which drive them,” Laith Khalaf, head of investment analysis at AJ Bell told The National.
“However, interest rate policy in each jurisdiction will likely have a big influence, especially if it starts to diverge.”
As such, divergence of interest rate policies is a key indicator of where the currencies will move relative to each other going forward.
The US Fed is expected to slash rates much more aggressively over the rest of 2024 than either the Bank of England or the European Central Bank (ECB), who've already started cutting rates in August and June.
Traders now see 94 basis points of Fed cuts across its three remaining meetings this year – that implies three 0.25 per cent reductions, with a strong chance that one of them will be larger. In June and July, that basis point prediction was around 30 points lower.
“It's a rate differential story,” said Commerzbank currency analyst Volkmar Baur.
“Inflation is coming down on both sides (of the Atlantic), but the Fed is expected to move a little bit more aggressively on the way down, and that closes the rate spreads a little bit and gives way for a stronger euro.”
More coverage from the Future Forum
Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster with a decades-long career in TV. He has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others. Karam is also the founder of Takreem.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
UAE currency: the story behind the money in your pockets
The permutations for UAE going to the 2018 World Cup finals
To qualify automatically
UAE must beat Iraq.
Australia must lose in Japan and at home to Thailand, with their losing margins and the UAE's winning margin over Iraq being enough to overturn a goal difference gap of eight.
Saudi Arabia must lose to Japan, with their losing margin and the UAE's winning margin over Iraq being enough to overturn a goal difference gap of eight.
To finish third and go into a play-off with the other third-placed AFC side for a chance to reach the inter-confederation play-off match
UAE must beat Iraq.
Saudi Arabia must lose to Japan, with their losing margin and the UAE's winning margin over Iraq being enough to overturn a goal difference gap of eight.
UAE squad
Esha Oza (captain), Al Maseera Jahangir, Emily Thomas, Heena Hotchandani, Indhuja Nandakumar, Katie Thompson, Lavanya Keny, Mehak Thakur, Michelle Botha, Rinitha Rajith, Samaira Dharnidharka, Siya Gokhale, Sashikala Silva, Suraksha Kotte, Theertha Satish (wicketkeeper) Udeni Kuruppuarachchige, Vaishnave Mahesh.
UAE tour of Zimbabwe
All matches in Bulawayo
Friday, Sept 26 – First ODI
Sunday, Sept 28 – Second ODI
Tuesday, Sept 30 – Third ODI
Thursday, Oct 2 – Fourth ODI
Sunday, Oct 5 – First T20I
Monday, Oct 6 – Second T20I
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Match info:
Wolves 1
Boly (57')
Manchester City 1
Laporte (69')
The%C2%A0specs%20
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Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Neymar's bio
Total club appearances 411
Total goals scored 241
Appearances for Barca 186
Goals scored for Barca 105
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Company profile
Name: Oulo.com
Founder: Kamal Nazha
Based: Dubai
Founded: 2020
Number of employees: 5
Sector: Technology
Funding: $450,000
Muslim Council of Elders condemns terrorism on religious sites
The Muslim Council of Elders has strongly condemned the criminal attacks on religious sites in Britain.
It firmly rejected “acts of terrorism, which constitute a flagrant violation of the sanctity of houses of worship”.
“Attacking places of worship is a form of terrorism and extremism that threatens peace and stability within societies,” it said.
The council also warned against the rise of hate speech, racism, extremism and Islamophobia. It urged the international community to join efforts to promote tolerance and peaceful coexistence.
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
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The five new places of worship
Church of South Indian Parish
St Andrew's Church Mussaffah branch
St Andrew's Church Al Ain branch
St John's Baptist Church, Ruwais
Church of the Virgin Mary and St Paul the Apostle, Ruwais
Match info:
Leicester City 1
Ghezzal (63')
Liverpool 2
Mane (10'), Firmino (45')
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
The%20Genius%20of%20Their%20Age
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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
