Foreign exchange rates have reacted to comments from the US Treasury Secretary's endorsement of a weak dollar and the British chancellor's satisfaction with a strengthening sterling, comments that drew criticism from the IMF.
A day before US President Donald Trump’s arrival at the Swiss ski resort, his top economic minister Stephen Mnuchin sent the dollar tumbling by saying a weak currency is good for exports.
"Obviously a weaker dollar is good for us as it relates to trade and opportunities,” Mr Mnuchin told reporters in Davos. The currency’s short term value is 'not a concern of ours at all,' he said.
The greenback, extending its 2018 slide as Mr Mnuchin spoke, is now at its lowest level since December 2014. The euro also climbed to its strongest against the dollar since 2014, while gold rose to as much as $1,366.15 an ounce on Thursday, its best mark since August 2016, before paring gains. A weak US dollar and fears of an equity market correction are sparking interest in gold.
Investors have sold the US dollar in part because of concern over Mr Trump’s protectionist push, highlighted by this week’s slapping of tariffs on solar panels and washing machines.
It is a message Mr Trump is likely to send in person on Friday when he becomes the first US president in 18 years to address the Davos gathering of corporate executives and investors who tend to favour free trade.
“The most recent appreciation in the euro against the dollar largely reflects dollar weakness related to political risk in the US," said Danielle Haralambous, UK analyst at the Economist Intelligence Unit. "Political risk is likely to remain high in the euro zone this year, but we expect the region's economic recovery to provide support for the single currency."
Mr Mnuchin’s remarks were seen by markets as a departure from traditional US currency policy and a sign that the Trump administration is stepping up its attack on China and other big trading partners as part of its "America First" agenda.
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Gold could climb to four-year high of $1400 an ounce, analysts say
Euro strength may curtail quick ECB interest rate hike
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"It's a further sign that the dollar doesn't have that historic policy support anymore," Connor Campbell, markets analyst at SpreadEx, told The National. "It will also raise fears about the risk of global currency wars again – although we should be careful not to read too much into an errant comment made at Davos."
Speaking on Thursday, International Monetary Fund Managing Director Christine Lagarde urged Mr Mnuchin to explain his comments.
“I really hope that Secretary Mnuchin has a chance to clarify exactly what he said,” Ms Lagarde said in Bloomberg TV interview at Davos. “The dollar is of all currencies a floating currency and one where value is determined by markets and geared by the fundamentals of US policy.”
She also reiterated the IMF’s view, presented in its World Economic Outlook this week, that the US tax reform is likely to lead to dollar’s strengthening in the medium term.
Mr Mnuchin, however, downplayed the issue on Thursday, insisting the Trump administration "believes in free currencies" and was "not concerned with where the dollar is in the short term".
He also denied that America is trying to launch a trade war, insisting that the US doesn’t want less trade, it wants “fair trade”.
Meanwhile, UK Chancellor Philip Hammond used an interview at Davos to stress that he is “very happy” with the strength of sterling, as the British currency soared to its highest level since the Brexit vote.
“Over the past few days, we’ve seen the pound appreciate against the dollar quite rapidly, but it’s pretty stable against the euro,” Mr Hammond told Bloomberg TV, as the currency pushed past $1.43. “So we’re very happy with where the currency is at the moment.”
Sterling's recent strength is partly driven by expectations of an earlier-than-expected UK rate rise, given strong data including Wednesday's employment and wages figures. But the weak greenback is also a major driver, helped by Mr Mnuchin's comments.
"It's really dollar weakness, rather than sterling strength," Alan Clarke, an economist at Scotia Bank, told The National. "Against the dollar, sterling has appreciated by 6.6 per cent since November 1, which is when the Bank of England raised interest rates. But if you look at a basket of currencies reflecting the UK's main trading partners, sterling's only up by about 2.2 per cent."
Mr Hammond said inflation was peaking and sterling appreciating as the economy recovered from the initial shock of the Brexit vote in 2016. "It looks as though inflation has peaked now ... I would expect inflation to begin to decline," he told the World Economic Forum on Thursday.
Turning to Mr Mnuchin, he added: "And we seem to be recovering quite a bit more, Steve, thanks very much."
Against the euro, sterling is broadly unchanged, down just 0.01 per cent at €1.1473. But the euro continues to climb against the dollar, 0.11 per cent better at $1.2421. Since the beginning of 2017, the euro has risen 18 per cent against the dollar.
The single currency was stoked by the minutes of the European Central Bank's December meeting, which revealed the governor's plan to "revisit" its quantitative easing policy early this year.
However, the ECB left its massive support for the eurozone economy in place on Thursday, opting not to rock the boat further after Mr Mnuchin’s comments.
The Frankfurt institution left interest rates at historic lows and held fast to plans to buy €30 billion of government and corporate bonds per month until September, offering no hints about when it might step back from the mammoth stimulus programme.
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
Landfill in numbers
• Landfill gas is composed of 50 per cent methane
• Methane is 28 times more harmful than Co2 in terms of global warming
• 11 million total tonnes of waste are being generated annually in Abu Dhabi
• 18,000 tonnes per year of hazardous and medical waste is produced in Abu Dhabi emirate per year
• 20,000 litres of cooking oil produced in Abu Dhabi’s cafeterias and restaurants every day is thrown away
• 50 per cent of Abu Dhabi’s waste is from construction and demolition
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
More from Rashmee Roshan Lall
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
Tips to stay safe during hot weather
- Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
- Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
- Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
- Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
- Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
- Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
- Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Recycle Reuse Repurpose
New central waste facility on site at expo Dubai South area to handle estimated 173 tonne of waste generated daily by millions of visitors
Recyclables such as plastic, paper, glass will be collected from bins on the expo site and taken to the new expo Central Waste Facility on site
Organic waste will be processed at the new onsite Central Waste Facility, treated and converted into compost to be re-used to green the expo area
Of 173 tonnes of waste daily, an estimated 39 per cent will be recyclables, 48 per cent organic waste and 13 per cent general waste.
About 147 tonnes will be recycled and converted to new products at another existing facility in Ras Al Khor
Recycling at Ras Al Khor unit:
Plastic items to be converted to plastic bags and recycled
Paper pulp moulded products such as cup carriers, egg trays, seed pots, and food packaging trays
Glass waste into bowls, lights, candle holders, serving trays and coasters
Aim is for 85 per cent of waste from the site to be diverted from landfill
'The worst thing you can eat'
Trans fat is typically found in fried and baked goods, but you may be consuming more than you think.
Powdered coffee creamer, microwave popcorn and virtually anything processed with a crust is likely to contain it, as this guide from Mayo Clinic outlines:
Baked goods - Most cakes, cookies, pie crusts and crackers contain shortening, which is usually made from partially hydrogenated vegetable oil. Ready-made frosting is another source of trans fat.
Snacks - Potato, corn and tortilla chips often contain trans fat. And while popcorn can be a healthy snack, many types of packaged or microwave popcorn use trans fat to help cook or flavour the popcorn.
Fried food - Foods that require deep frying — french fries, doughnuts and fried chicken — can contain trans fat from the oil used in the cooking process.
Refrigerator dough - Products such as canned biscuits and cinnamon rolls often contain trans fat, as do frozen pizza crusts.
Creamer and margarine - Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3C%2Fstrong%3E%3A%20ASI%20(formerly%20DigestAI)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202017%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Quddus%20Pativada%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Artificial%20intelligence%2C%20education%20technology%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%243%20million-plus%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20GSV%20Ventures%2C%20Character%2C%20Mark%20Cuban%3C%2Fp%3E%0A
UAE and Russia in numbers
UAE-Russia ties stretch back 48 years
Trade between the UAE and Russia reached Dh12.5 bn in 2018
More than 3,000 Russian companies are registered in the UAE
Around 40,000 Russians live in the UAE
The number of Russian tourists travelling to the UAE will increase to 12 percent to reach 1.6 million in 2023
T20 World Cup Qualifier, Muscat
UAE FIXTURES
Friday February 18: v Ireland
Saturday February 19: v Germany
Monday February 21: v Philippines
Tuesday February 22: semi-finals
Thursday February 24: final
