The dollar was headed for its best week in nearly nine months on Friday as investors scrambled to price in a sooner-than-expected ending to extraordinary US monetary stimulus in the days after a surprise shift in tone from the Federal Reserve.
Since Wednesday, when Fed officials projected possible rate hikes in 2023, the greenback has surged some 1.8 per cent on the euro and more than 2 per cent against the Australian dollar and the negative-yielding franc as short-sellers have rushed to close positions.
The dollar index has zoomed above its 200-day moving average, hitting a more than two-month high of 92.010, and is on track for a 1.6 per cent weekly gain, its largest since last September.
US dollar shorts were based on that unending liquidity tap from the Fed, and zero rates
“The Fed sent a very crucial message that the days of plentiful, abundant, unlimited liquidity are drawing to a close,” Richard Franulovich, head of FX strategy at Westpac in Sydney, said.
“We can now see an end point to zero rates ... and they’ve told us in very plain-speaking English that they’ve commenced the conversation on how to commence tapering,” he said. “That signal has precipitated a dramatic position unwind, because US dollar shorts were based on that unending liquidity tap from the Fed, and zero rates.”
The Antipodeans were sold even lower in Asia on Friday, while other majors stabilised. The euro sat just above a two-month low at $1.1914.
The Aussie struck its lowest since December at $0.7521 on Friday and the kiwi fell to its weakest since April at $0.6982, defying eye-popping reports on Australian jobs and New Zealand growth this week.
The dollar is also on track for a 0.5 said rise against the yen. The yen sat at 110.25 per dollar after hitting an 11-week low of 110.82 on Thursday and was little moved by the Bank of Japan keeping its main policy settings steady, as expected.
Sterling fell 0.2 said to $1.3900 and is headed for a weekly loss of 1.5 per cent.
“You can often glean a sense of how the market is positioned by the way it trades,” Mr Franulovich said. “The viciousness with which the dollar has bounced back ... tells me that there’s been a decisive shift for a lot of big, stale positions. This is a meaningful, decisive re-thinking in dollar prospects.”
Bear hunt
Investors had piled into bearish dollar positions, banking on twin current account and budget deficits pulling capital abroad and the dollar lower as the global pandemic recovery gathers momentum.
The shakeout has been triggered by Fed forecasts, or “dot plots”, showing 13 of the 18-person policy board saw rates rising in 2023, versus only six previously, with the median board member tipping two hikes in 2023.
While the plots are not commitments and have a poor track record of predicting rates, the sudden shift was a shock that has also reverberated through the bond market and metal prices.
Gold has been walloped by rises in the dollar and US yields and is on track for a more than 5 per cent weekly loss.
Treasuries sold heavily, although the US yield curve has flattened as traders seem hopeful that a more aggressive Fed could move more quickly to head off inflation – leading some to reckon that the dollar’s bear case remains intact.
“There may be some expectation that the US dollar will see more support on the back of a higher rates outlook,” Kerry Craig, global market strategist at J.P. Morgan Asset Management, said.
“While this may be the case in the very near term, it’s difficult to make the case for ongoing US dollar strength as investors shift their focus to opportunities outside the US and the drag created by twin deficits.”
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
Result
Crystal Palace 0 Manchester City 2
Man City: Jesus (39), David Silva (41)
Summer special
MATCH INFO
West Ham United 2 (Antonio 73', Ogbonna 90 5')
Tottenham Hotspur 3 (Son 36', Moura 42', Kane 49')
Meydan racecard:
6.30pm: Al Maktoum Challenge Round 2 (PA) Group 1 | US$75,000 (Dirt) | 2,200 metres
7.05pm: UAE 1000 Guineas (TB) Listed | $250,000 (D) | 1,600m
7.40pm: Meydan Classic Trial (TB) Conditions | $100,000 (Turf) | 1,400m
8.15pm: Al Shindagha Sprint (TB) Group 3 | $200,000 (D) | 1,200m
8.50pm: Handicap (TB) | $175,000 (D) | 1,600m
9.25pm: Handicap (TB) | $175,000 (T) | 2,000m
10pm: Handicap (TB) | $135,000 (T) | 1,600m
The specs: 2018 Chevrolet Trailblazer
Price, base / as tested Dh99,000 / Dh132,000
Engine 3.6L V6
Transmission: Six-speed automatic
Power 275hp @ 6,000rpm
Torque 350Nm @ 3,700rpm
Fuel economy combined 12.2L / 100km
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
Abu Dhabi Sustainability Week
Sholto Byrnes on Myanmar politics
The specs: McLaren 600LT
Price, base: Dh914,000
Engine: 3.8-litre twin-turbo V8
Transmission: Seven-speed automatic
Power: 600hp @ 7,500rpm
Torque: 620Nm @ 5,500rpm
Fuel economy 12.2.L / 100km
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
COMPANY%20PROFILE
%3Cp%3ECompany%20name%3A%20CarbonSifr%3Cbr%3EStarted%3A%202022%3Cbr%3EBased%3A%20Dubai%3Cbr%3EFounders%3A%20Onur%20Elgun%2C%20Mustafa%20Bosca%20and%20Muhammed%20Yildirim%3Cbr%3ESector%3A%20Climate%20tech%3Cbr%3EInvestment%20stage%3A%20%241%20million%20raised%20in%20seed%20funding%3Cbr%3E%3C%2Fp%3E%0A
The Bio
Favourite Emirati dish: I have so many because it has a lot of herbs and vegetables. Harees (oats with chicken) is one of them
Favourite place to go to: Dubai Mall because it has lots of sports shops.
Her motivation: My performance because I know that whatever I do, if I put the effort in, I’ll get results
During her free time: I like to drink coffee - a latte no sugar and no flavours. I do not like cold drinks
Pet peeve: That with every meal they give you a fries and Pepsi. That is so unhealthy
Advice to anyone who wants to be an ironman: Go for the goal. If you are consistent, you will get there. With the first one, it might not be what they want but they should start and just do it
The biog
Name: Shamsa Hassan Safar
Nationality: Emirati
Education: Degree in emergency medical services at Higher Colleges of Technology
Favourite book: Between two hearts- Arabic novels
Favourite music: Mohammed Abdu and modern Arabic songs
Favourite way to spend time off: Family visits and spending time with friends
Mohammed bin Zayed Majlis
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
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match info
Chelsea 2
Willian (13'), Ross Barkley (64')
Liverpool 0
SPECS
Mini John Cooper Works Clubman and Mini John Cooper Works Countryman
Engine: two-litre 4-cylinder turbo
Transmission: nine-speed automatic
Power: 306hp
Torque: 450Nm
Price: JCW Clubman, Dh220,500; JCW Countryman, Dh225,500
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
Two-step truce
The UN-brokered ceasefire deal for Hodeidah will be implemented in two stages, with the first to be completed before the New Year begins, according to the Arab Coalition supporting the Yemeni government.
By midnight on December 31, the Houthi rebels will have to withdraw from the ports of Hodeidah, Ras Issa and Al Saqef, coalition officials told The National.
The second stage will be the complete withdrawal of all pro-government forces and rebels from Hodeidah city, to be completed by midnight on January 7.
The process is to be overseen by a Redeployment Co-ordination Committee (RCC) comprising UN monitors and representatives of the government and the rebels.
The agreement also calls the deployment of UN-supervised neutral forces in the city and the establishment of humanitarian corridors to ensure distribution of aid across the country.
The specs
Engine: 2.9-litre twin-turbo V6
Power: 540hp at 6,500rpm
Torque: 600Nm at 2,500rpm
Transmission: Eight-speed auto
Kerb weight: 1580kg
Price: From Dh750k
On sale: via special order
Teams
Punjabi Legends Owners: Inzamam-ul-Haq and Intizar-ul-Haq; Key player: Misbah-ul-Haq
Pakhtoons Owners: Habib Khan and Tajuddin Khan; Key player: Shahid Afridi
Maratha Arabians Owners: Sohail Khan, Ali Tumbi, Parvez Khan; Key player: Virender Sehwag
Bangla Tigers Owners: Shirajuddin Alam, Yasin Choudhary, Neelesh Bhatnager, Anis and Rizwan Sajan; Key player: TBC
Colombo Lions Owners: Sri Lanka Cricket; Key player: TBC
Kerala Kings Owners: Hussain Adam Ali and Shafi Ul Mulk; Key player: Eoin Morgan
Venue Sharjah Cricket Stadium
Format 10 overs per side, matches last for 90 minutes
Timeline October 25: Around 120 players to be entered into a draft, to be held in Dubai; December 21: Matches start; December 24: Finals
