These are great times to be paid in US dollars. The world's unofficial reserve currency is on a roll, beating all-comers as the US economy grew at an annualised rate of 4.2 per cent in the second quarter.
To put that into perspective, that is almost double the eurozone second-quarter growth of 2.1 per cent.
The US economy is now enjoying the second longest period of economic growth since the Second World War, and if sustained into next summer it will beat the record 10-year between 1991 and the dot-com meltdown in March 2001.
To stop the economy overheating, the US Federal Reserve has been increasing interest rates, which is driving the greenback even higher.
The latest increase came last week, when chairman Jerome Powell announced that the Fed was lifting rates by 0.25 per cent to a range between 2 and 2.25 per cent. This is the third this year, and the eighth since it started tightening in 2015.
Mr Powell said the US economy is now strong enough that the stimulus of low rates is no longer necessary. This may be the last increase for this year but analysts are forecasting another three in 2019 and one more in 2020, which would lift rates above 3 per cent.
If the Fed follows through the dollar may rise even higher, as global investor inflows surge into the country in search of higher returns.
UAE residents will hardly need reminding that their dirham-linked dollar earnings now go much further when travelling, buying assets in other countries or making remittances back home.
Safe haven asset
Gaurav Kashyap, head of futures at Dubai-registered broker EGM Futures, says the US dollar is up a further 3 per cent this year against a basket of weighted major currencies. “I have maintained a dollar bullish bias for more than a year and expect more upside moves through the end of 2018.”
As the US leads the world in hiking rates, money will continue to flow into US assets such as the dollar, Government bonds (known as Treasuries) and stocks.
Mr Kashyap says President Donald Trump’s trade war could backfire by hitting US growth and knocking dollar optimism, but it could go either way. “The US dollar is a safe haven asset. If the trade war hits global markets, the US dollar could thrive.”
Devesh Mamtani, head of investments and advisory (financial markets) at Century Financial Brokers, says the dollar bull trend should continue as the US economy created 201,000 jobs and average hourly wages climbed 2.9 per cent in August, both higher than expected, according to the non-farm payrolls report. “Rising geo-political tensions with Iran and Trump ratcheting up the battle with China could trigger a flight of capital to safe haven US Treasuries.”
However, Mr Mamtani says it is tough trying to call the top or bottom of any market. “For remittance purposes most people should take advantage of current rates, while more savvy investors can use futures contracts to hedge their positions, after taking advice from a qualified adviser.”
___________
Read more:
The US dollar dip is a buying opportunity for investors
Euro likely to stay weak against dollar until mid-2019
Are these the warning signs of an approaching global recession?
___________
Emerging markets pain
The strong US currency is punishing emerging market countries that have borrowed heavily in dollars and now find their debts more expensive to service.
Argentina, Turkey, Brazil and South Africa are in trouble and Rebecca O’Keeffe, head of investment at online trading platform Interactive Investor, says any further contagion could ultimately infect the US. “The increasing divergence between the US and other economies may cause some to worry how long the party can last for investors in the States.”
However, investors who are keeping their faith in US stocks and shunning emerging markets are getting it right for now, she added. “At some point emerging markets may become more attractive, but for now investors are happy to steer clear.”
Commodity shock
Commodities such as oil, metals and minerals are priced in dollars so when the greenback rises, they get more expensive for buyers in other currencies, hitting demand and prices.
Fawad Razaqzada, technical analyst at currency brokers Forex.com, says demand has also been hit by fears over emerging markets and China, still the world's most voracious consumer of commodities. "Copper, silver and to a lesser degree gold have been absolutely hammered recently."
However, this could be a buying opportunity for dollar earners, Mr Razaqzada says. “Demand for these commodities will never perish. At these relatively inexpensive levels, they also become attractive for long-term investors.”
Property threat
The downside for UAE residents is that because the dirham is pegged to the dollar, local interest rates are rising in lockstep with the Fed.
Last week, the Central Bank of the UAE followed the Fed by lifting its benchmark interest rate 25 basis points to 2.50 per cent on the certificate of deposits it uses to transmit interest rate changes to the local banking system.
If the Fed meets market expectations by bumping up rates three times next year, this would drive UAE interest rates to 3.25 per cent.
Faisal Durrani, partner and head of research at real estate specialists Cluttons, which operates in Dubai, says this mismatch between economic performance and monetary policy isn’t new. “It has sparked debates in the past about the need to re-examine the merits of a fixed peg.”
Further interest rates could pile added pressure on the local property market, where the total value of real estate transactions fell 16 per cent to Dh111 billion in the first half of 2018, according to the Dubai Land Department.
Mr Durrani says this drives up costs for both mortgage borrowers and property developers. “It may catch some people off guard, but the generally mute property market should shield households to an extent.”
_________
Read more:
Will higher US interest rates and the stronger dollar destroy the stock market?
Does the Brexit decision present an unmissable buying opportunity?
How to short stocks you think will fail
_________
Peak dollar
Have we reached peak dollar? Luca Paolini, chief strategist at fund manager Pictet Asset Management, reckons the US dollar is now “as richly valued as it's been in for at least a quarter of a century”, but cannot go much higher. “While dollar strength is underpinned by a robust US economy, rising inflation and expansive fiscal policy, the greenback’s ascent may have run its course.”
The US dollar may now be overbought and vulnerable to a correction. “Further gains are likely to be limited unless there’s an inflationary surprise or the current administration offers up another round of tax cuts.”
Emerging market valuations now look oversold, Mr Paolini says, which could make now a good time to buy emerging market stocks for those willing to take a chance. “We are less enthusiastic about European and US equities, however, particularly as the latter look poor value.”
Enjoy dollar strength for now but remember that the good times will not roll forever. They never do.
Fixtures
Tuesday - 5.15pm: Team Lebanon v Alger Corsaires; 8.30pm: Abu Dhabi Storms v Pharaohs
Wednesday - 5.15pm: Pharaohs v Carthage Eagles; 8.30pm: Alger Corsaires v Abu Dhabi Storms
Thursday - 4.30pm: Team Lebanon v Pharaohs; 7.30pm: Abu Dhabi Storms v Carthage Eagles
Friday - 4.30pm: Pharaohs v Alger Corsaires; 7.30pm: Carthage Eagles v Team Lebanon
Saturday - 4.30pm: Carthage Eagles v Alger Corsaires; 7.30pm: Abu Dhabi Storms v Team Lebanon
Company%20profile%20
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3EElggo%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20August%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Luma%20Makari%20and%20Mirna%20Mneimneh%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20Education%20technology%20%2F%20health%20technology%3Cbr%3E%3Cstrong%3ESize%3A%3C%2Fstrong%3E%20Four%20employees%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-seed%3C%2Fp%3E%0A
The Florida Project
Director: Sean Baker
Starring: Bria Vinaite, Brooklynn Prince, Willem Dafoe
Four stars
The specs
Engine: 6.2-litre V8
Transmission: ten-speed
Power: 420bhp
Torque: 624Nm
Price: Dh325,125
On sale: Now
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
RESULTS
2pm: Handicap (PA) Dh40,000 (Dirt) 1,000m
Winner: AF Mozhell, Saif Al Balushi (jockey), Khalifa Al Neyadi (trainer)
2.30pm: Maiden (PA) Dh40,000 (D) 2,000m
Winner: Majdi, Szczepan Mazur, Abdallah Al Hammadi.
3pm: Handicap (PA) Dh40,000 (D) 1,700m
Winner: AF Athabeh, Tadhg O’Shea, Ernst Oertel.
3.30pm: Handicap (PA) Dh40,000 (D) 1,700m
Winner: AF Eshaar, Bernardo Pinheiro, Khalifa Al Neyadi
4pm: Gulf Cup presented by Longines Prestige (PA) Dh150,000 (D) 1,700m
Winner: Al Roba’a Al Khali, Al Moatasem Al Balushi, Younis Al Kalbani
4.30pm: Handicap (TB) Dh40,000 (D) 1,200m
Winner: Apolo Kid, Antonio Fresu, Musabah Al Muahiri
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Turning%20waste%20into%20fuel
%3Cp%3EAverage%20amount%20of%20biofuel%20produced%20at%20DIC%20factory%20every%20month%3A%20%3Cstrong%3EApproximately%20106%2C000%20litres%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3EAmount%20of%20biofuel%20produced%20from%201%20litre%20of%20used%20cooking%20oil%3A%20%3Cstrong%3E920ml%20(92%25)%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3ETime%20required%20for%20one%20full%20cycle%20of%20production%20from%20used%20cooking%20oil%20to%20biofuel%3A%20%3Cstrong%3EOne%20day%3C%2Fstrong%3E%3C%2Fp%3E%0A%3Cp%3EEnergy%20requirements%20for%20one%20cycle%20of%20production%20from%201%2C000%20litres%20of%20used%20cooking%20oil%3A%3Cbr%3E%3Cstrong%3E%E2%96%AA%20Electricity%20-%201.1904%20units%3Cbr%3E%E2%96%AA%20Water-%2031%20litres%3Cbr%3E%E2%96%AA%20Diesel%20%E2%80%93%2026.275%20litres%3C%2Fstrong%3E%3C%2Fp%3E%0A
Results
2.30pm Maiden (PA) Dh40,000 1,200m
Winner Lamia, Tadhg O’Shea, Ernst Oertel.
3pm Handicap (PA) Dh40,000 1,000m
Winner Jap Al Afreet, Elione Chaves, Irfan Ellahi.
3.30pm Handicap (PA) Dh40,000 1,700m
Winner MH Tawag, Bernardo Pinheiro, Elise Jeanne.
4pm Handicap (TB) Dh40,000 2,000m
Winner Skygazer, Sandro Paiva, Ali Rashid Al Raihe.
4.30pm The Ruler of Sharjah Cup Prestige (PA) Dh250,000 1,700m
Winner AF Kal Noor, Tadhg O’Shea, Ernst Oertel.
5pm Sharjah Marathon (PA) Dh70,000 2,700m
Winner RB Grynade, Bernardo Pinheiro, Eric Lemartinel.
Spider-Man: No Way Home
Director: Jon Watts
Stars: Tom Holland, Zendaya, Jacob Batalon
Rating:*****
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E3.6-litre%2C%20V6%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3Eeight-speed%20auto%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E285hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E353Nm%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EDh159%2C900%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Enow%3C%2Fp%3E%0A
TOP 5 DRIVERS 2019
1 Lewis Hamilton, Mercedes, 10 wins 387 points
2 Valtteri Bottas, Mercedes, 4 wins, 314 points
3 Max Verstappen, Red Bull, 3 wins, 260 points
4 Charles Leclerc, Ferrari, 2 wins, 249 points
5 Sebastian Vettel, Ferrari, 1 win, 230 points
UAE SQUAD
Ahmed Raza (Captain), Rohan Mustafa, Jonathan Figy, CP Rizwan, Junaid Siddique, Mohammad Usman, Basil Hameed, Zawar Farid, Vriitya Aravind (WK), Waheed Ahmed, Karthik Meiyappan, Zahoor Khan, Darius D'Silva, Chirag Suri
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.”
CHINESE GRAND PRIX STARTING GRID
1st row
Sebastian Vettel (Ferrari)
Kimi Raikkonen (Ferrari)
2nd row
Valtteri Bottas (Mercedes-GP)
Lewis Hamilton (Mercedes-GP)
3rd row
Max Verstappen (Red Bull Racing)
Daniel Ricciardo (Red Bull Racing)
4th row
Nico Hulkenberg (Renault)
Sergio Perez (Force India)
5th row
Carlos Sainz Jr (Renault)
Romain Grosjean (Haas)
6th row
Kevin Magnussen (Haas)
Esteban Ocon (Force India)
7th row
Fernando Alonso (McLaren)
Stoffel Vandoorne (McLaren)
8th row
Brendon Hartley (Toro Rosso)
Sergey Sirotkin (Williams)
9th row
Pierre Gasly (Toro Rosso)
Lance Stroll (Williams)
10th row
Charles Leclerc (Sauber)
arcus Ericsson (Sauber)
QUARTER-FINAL
Wales 20-19 France
Wales: T: Wainwright, Moriarty. Cons: Biggar (2) Pens: Biggar 2
France: T: Vahaamahina, Ollivon, Vakatawa Cons: Ntamack (2)
MATCH INFO
AC Milan v Inter, Sunday, 6pm (UAE), match live on BeIN Sports
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
No more lice
Defining head lice
Pediculus humanus capitis are tiny wingless insects that feed on blood from the human scalp. The adult head louse is up to 3mm long, has six legs, and is tan to greyish-white in colour. The female lives up to four weeks and, once mature, can lay up to 10 eggs per day. These tiny nits firmly attach to the base of the hair shaft, get incubated by body heat and hatch in eight days or so.
Identifying lice
Lice can be identified by itching or a tickling sensation of something moving within the hair. One can confirm that a person has lice by looking closely through the hair and scalp for nits, nymphs or lice. Head lice are most frequently located behind the ears and near the neckline.
Treating lice at home
Head lice must be treated as soon as they are spotted. Start by checking everyone in the family for them, then follow these steps. Remove and wash all clothing and bedding with hot water. Apply medicine according to the label instructions. If some live lice are still found eight to 12 hours after treatment, but are moving more slowly than before, do not re-treat. Comb dead and remaining live lice out of the hair using a fine-toothed comb.
After the initial treatment, check for, comb and remove nits and lice from hair every two to three days. Soak combs and brushes in hot water for 10 minutes.Vacuum the floor and furniture, particularly where the infested person sat or lay.
Courtesy Dr Vishal Rajmal Mehta, specialist paediatrics, RAK Hospital
The specs
Price, base / as tested Dh100,000 (estimate)
Engine 2.4L four-cylinder
Gearbox Nine-speed automatic
Power 184bhp at 6,400rpm
Torque 237Nm at 3,900rpm
Fuel economy, combined 9.4L/100km
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
We Weren’t Supposed to Survive But We Did
We weren’t supposed to survive but we did.
We weren’t supposed to remember but we did.
We weren’t supposed to write but we did.
We weren’t supposed to fight but we did.
We weren’t supposed to organise but we did.
We weren’t supposed to rap but we did.
We weren’t supposed to find allies but we did.
We weren’t supposed to grow communities but we did.
We weren’t supposed to return but WE ARE.
Amira Sakalla
Apple product price list
iPad Pro
11" - $799 (64GB)
12.9" - $999 (64GB)
MacBook Air
$1,199
Mac Mini
$799
