The dollar stayed near its 2018 peak on Monday after US jobs and wages data did little to temper perceptions of strength in the US economy, though renewed concerns about trade frictions could cloud its outlook.
The dollar index stood at 92.461, down 0.1 per cent but still near Friday's high of 92.908, which was its firmest level since late December.
The dollar index has risen for three straight weeks, maintaining its strength after Friday's mixed US data.
The US economy added fewer jobs than expected and the average hourly earnings, closely watched for signs of inflationary pressures, rose a less-than-expected 0.1 per cent in April, leaving the annual increase at 2.6 per cent.
The unemployment rate dropped to near a 17 and a half year low of 3.9 per cent, although this was driven in part by Americans leaving the labour force.
None of this changed the perception that the Federal Reserve will likely hike interest rates at least twice, and possibly three times, by year-end.
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In contrast, recent data suggested Europe's stellar growth last year is losing momentum, leading speculators to trim bets on the single currency on expectations the European Central Bank will wind down its stimulus.
The euro changed hands at $1.1962, not far from Friday's four-month low of $1.1910.
Data from US financial watchdog published late on Friday showed speculators' net long position in the euro in Chicago's futures exchange declined only slightly in the latest week.
They held 120,568 contracts of net short positions , down from a record 151,476 set last month but still at a high level.
A wider measure of dollar positioning that includes contracts on some emerging market currencies showed net dollar shorts shrank to $18.32 billion, from a seven-year high of $28.18bn two weeks earlier.
"Speculators' positioning has gone to extreme levels as they had been selling the dollar continuously," Yukio Ishizuki, senior strategist at Daiwa Securities.
Concerns about US President Donald Trump's protectionism was one big reason many investors had shied away from the dollar earlier.
Some market participants expect worries over a trade war could return after talks between the US and China produced little apparent progress.
In a sign that the trade tension is spilling over to other issues, Beijing and Washington came to loggerheads over how to refer to Taiwan, Hong Kong and Macau.
"Trade issues are likely to persist towards the US mid-term elections. So in the long run, the dollar is likely to decline," said a currency trader at a Japanese bank.
Traders also kept an eye on the fate of Iran's 2015 nuclear deal, from which Trump has threatened to pull out.
An escalating diplomatic standoff could have innumerable repercussions, including a further rise in oil prices and damage to investors' risk appetite.
Trump has said that unless European allies rectify "flaws" in Tehran's deal with world powers by May 12 he will refuse to extend US sanctions relief for Iran.
Elsewhere, the British pound traded at $1.3538, near its four-month low of $1.3487 touched on Tuesday.
The dollar stood little changed at 109.10 yen, off its three-month high of 110.05 yen.
The yen's rebound was in part driven by short-covering by Japanese margin traders, especially against the Turkish lira , which fell to record lows during Japan's Golden Week holidays.
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Ms Yang's top tips for parents new to the UAE
- Join parent networks
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Anxiety and work stress major factors
Anxiety, work stress and social isolation are all factors in the recogised rise in mental health problems.
A study UAE Ministry of Health researchers published in the summer also cited struggles with weight and illnesses as major contributors.
Its authors analysed a dozen separate UAE studies between 2007 and 2017. Prevalence was often higher in university students, women and in people on low incomes.
One showed 28 per cent of female students at a Dubai university reported symptoms linked to depression. Another in Al Ain found 22.2 per cent of students had depressive symptoms - five times the global average.
It said the country has made strides to address mental health problems but said: “Our review highlights the overall prevalence of depressive symptoms and depression, which may long have been overlooked."
Prof Samir Al Adawi, of the department of behavioural medicine at Sultan Qaboos University in Oman, who was not involved in the study but is a recognised expert in the Gulf, said how mental health is discussed varies significantly between cultures and nationalities.
“The problem we have in the Gulf is the cross-cultural differences and how people articulate emotional distress," said Prof Al Adawi.
“Someone will say that I have physical complaints rather than emotional complaints. This is the major problem with any discussion around depression."
Daniel Bardsley
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
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