The US dollar enjoyed a mini renaissance in the first half of the month. Asif Hassan / AFP
The US dollar enjoyed a mini renaissance in the first half of the month. Asif Hassan / AFP

The US dollar is in a rampant mood but for how long?



June has been an inspirational month for dollar longs. Building on the back of two consecutive months of gains, the greenback was in a rampant mood at the half way mark of the month.

Last week’s double dose of increasing inflation data (the US's year-on-year consumer price index came in at 2.8 per cent versus the 2.7 expected and 2.5 per cent previous) and a hawkish Federal Open Market Committee spurred the Dollar Index to the 95 handle. While the increase in US rates to the revised 1.75 to 2 per cent band was priced in, it was the upgrades to future US economic projections and a largely optimistic tone that rallied dollar bulls.

The Fed noted that the economy was growing at a “solid” rate, an upgrade to the “moderate” rating adopted in May’s meeting. There were upgrades to the expected unemployment rate (from a median rate of 3.8 per cent forecast in March to the revised 3.6 per cent in June) and overall GDP is expected to grow to 2.8 per cent versus a march forecast of 2.7 per cent. Perhaps most notably, the release all but cemented the need for two additional rate hikes through the rest of 2018.

While the dollar tested 95 levels in the aftermath of the announcement, long positions ran out of steam as the Index finds itself currently consolidating in the mid 94 range. We would need to see a daily closing above that 95 level to conclude that the dollar is due up for another leg higher towards 97 through the summer months. Levels of 93.60 would need to hold through the weeks ahead to maintain this bullish bias in the greenback.

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Read more:

While the US dollar shone in May, it is now taking a breather

US dollar takes centre stage in the financial universe

US dollar strengthens as geopolitical risks ease

Optimism returns to the markets but volatility is far from over

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Despite the bullish mood in US financial markets, US equities remained rather unenthused. While our 2675 downside target is yet to materialise – the upside resistance stills holds true at 2800 as shared in my last publication. We saw 10-year treasury yields spike above 3 per cent following the Fed announcement, and as long as there is consolidation below these levels, gains in US equity markets will remain in check.

The dollar move has taken its toll on the euro, which found itself in the middle of a selling spree following the European Central Bank rate decision last Thursday. While Mario Draghi and the ECB kept rates unchanged, the president signalled an end to their massive 2 trillion euro, three-year asset purchase plan this December. However it was his dovish stance towards future interest rates – a pledge to not raise rates for another 12 months that spooked forex markets, which had until that point priced in a more than 30 per cent chance of an ECB rate hike within a year.

The dovish sentiment rallied European bourses, but sparked a large downside move in the euro, which slid more than 1.88 per cent against the US dollar. After testing lows at 1.1560, the EUR/USD contract on Dubai Gold & Commodities Exchange is consolidating at that key 1.16 levels discussed in my column earlier this month. We would expect further pressure on euro prices heading into July, with 1.1430 the next strong support level.

Crude oil was trading lower on DGCX heading into the Opec meeting on June 22. The global energy picture is intriguing to say the last – while last week’s crude report showed massive drawdowns in inventories (crude oil inventories came in at 4.1 million barrels versus the 1.440 million expected and the 2.02 million previous), however data showed that production spiked up another 100,000 barrels a day, taking the 2018 total to a record high of 10.9 million barrels of output a day.

Crude markets have been shrugging off hints by Saudi Arabia and Russia that June may be the meeting in which they vote to cease the production cuts. If such a move were to materialise, our earlier downside targets in the band between 60-62 would come into range.

Along with the Opec meetings taking place on Friday, the Swiss National Bank and the Bank of England announce rates on Thursday with the US and UK GDP readings due out next week on June 28 and June 29 respectively.

Gaurav Kashyap is a market strategist at Equiti Global Markets

The views and opinions expressed in this article are those of the author and do not reflect the views of Equiti.

Cryopreservation: A timeline
  1. Keyhole surgery under general anaesthetic
  2. Ovarian tissue surgically removed
  3. Tissue processed in a high-tech facility
  4. Tissue re-implanted at a time of the patient’s choosing
  5. Full hormone production regained within 4-6 months
How the UAE gratuity payment is calculated now

Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.

The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.

1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):

a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33

b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.

2. For those who have worked more than five years

c. 333.33 x 30 = Dh10,000. So 30 days’ salary is Dh10,000 in gratuity entitlement for each year of service.

Note: The maximum figure cannot exceed two years total salary figure.

UAE currency: the story behind the money in your pockets
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

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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
Jawan
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EAtlee%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Shah%20Rukh%20Khan%2C%20Nayanthara%2C%20Vijay%20Sethupathi%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E4%2F5%3C%2Fp%3E%0A
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.” 

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
What is the FNC?

The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning. 
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval. 
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
 

MATCH INFO

English Premiership semi-finals

Saracens 57
Wasps 33

Exeter Chiefs 36
Newcastle Falcons 5

Ms Yang's top tips for parents new to the UAE
  1. Join parent networks
  2. Look beyond school fees
  3. Keep an open mind
NO OTHER LAND

Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal

Stars: Basel Adra, Yuval Abraham

Rating: 3.5/5

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
SPECS
%3Cp%3E%0D%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%204.0-litre%20twin-turbo%20V8%0D%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20750hp%20at%207%2C500rpm%0D%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20800Nm%20at%205%2C500rpm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%3C%2Fstrong%3E%207%20Speed%20dual-clutch%20auto%0D%0D%3Cbr%3E%3Cstrong%3ETop%20speed%3A%3C%2Fstrong%3E%20332kph%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%3C%2Fstrong%3E%2012.2L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3EYear%20end%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh1%2C430%2C000%20(coupe)%3B%20From%20Dh1%2C566%2C000%20(Spider)%3C%2Fp%3E%0A
At a glance

Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.

 

Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year

 

Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month

 

Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30 

 

Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse

 

Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth

 

Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances

The%20specs
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'O'
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Brief scoreline:

Manchester United 0

Manchester City 2

Bernardo Silva 54', Sane 66'

Super Saturday results

4pm: Mahab Al Shimaal Group 3 | US$350,000 | (Dirt) | 1,200m
Winner: Drafted, Pat Dobbs (jockey), Doug Watson (trainer).

4.35pm: Al Bastakiya Listed | $300,000 | (D) | 1,900m
Winner: Divine Image, Brett Doyle, Charlie Appleby.

5.10pm: Nad Al Sheba Turf Group 3 | $350,000 | (Turf) | 1,200m
Winner: Blue Point, William Buick, Charlie Appleby.

5.45pm: Burj Nahaar Group 3 | $350,000 | (D) | 1,600m
Winner: Muntazah, Jim Crowley, Doug Watson.

6.20pm: Dubai City of Gold Group 2 | $300,000 | (T) | 2,410m
Winner: Old Persian, William Buick, Charlie Appleby.

6.55pm: Al Maktoum Challenge Round 3 Group 1 | $600,000 | (D) | 2,000m
Winner: Capezzano, Mickael Barzalona, Salem bin Ghadayer.

7.30pm: Jebel Hatta Group 1 | $400,000 | (T) | 1,800m
Winner: Dream Castle, Christophe Soumillon, Saeed bin Suroor.