In July, the EU approved a €750 billion economic stimulus plan. Bloomberg
In July, the EU approved a €750 billion economic stimulus plan. Bloomberg
In July, the EU approved a €750 billion economic stimulus plan. Bloomberg
In July, the EU approved a €750 billion economic stimulus plan. Bloomberg

The US dollar is struggling to resist an improving euro


Tim Fox
  • English
  • Arabic

Last week was one of contrasting fiscal policy fortunes between the eurozone and the United States, with the eurozone apparently taking a big step forward to deal with its design flaws and the US appearing to struggle with the challenges of gridlock in an election year. This narrative has helped the euro reach its highest levels against the US dollar since 2018, as the greenback struggles against a broad basket of currencies, with even returning risk aversion unable to help it much.

The main headline-grabbing event of last week was the EU budget deal reached by the European Council, which featured a €750 billion (Dh3.2 trillion / US$874.2bn) recovery fund, known as 'Next Generation EU'.

The progress from the EU is in contrast to developments in the US, where negotiations over a fresh round of spending have stalled.

Climbdowns by the so-called ‘frugal four’ of the Netherlands, Austria, Sweden and Denmark will see the EU for the first time borrowing from capital markets to finance its expenditures, moving the 27-member bloc further along the path of fiscal integration. However, the deal also reduced the overall amount of grants to Covid-affected countries to €390bn from an original proposal of €500bn, but increased the amount of loans to €360bn from €250bn.

As ever with EU compromises, the headlines were probably more encouraging than some of the details. Anybody who expects this fund to result in a sudden boost to EU growth will likely be disappointed, as €750bn is a relatively small fraction of the eurozone economy and 70 per cent of the grants will not be disbursed until 2021 and 2022, and the rest in 2023.

Debt issuance is also scheduled to end in 2026, casting doubt on whether this will be a permanent arrangement. Furthermore, the overall budget has to be ratified by the EU Parliament and by individual EU Parliaments, and may yet face opposition from some countries.

In fact, according to some analysts, it will be the bigger countries like France and Germany that will benefit the most from the overall budget rather than the smaller indebted economies of the periphery, for whom the fund is intended. The euro benefited from the promise of fiscal integration, but it still largely remains a promise and not yet the real thing.

The progress from the EU is in contrast to developments in the US, where negotiations over a fresh round of spending have stalled. The delay was caused by Senate Republicans abandoning their plan to unveil a coronavirus relief bill after failing to agree with the White House on direct cash payments and extending unemployment insurance.

The legislation should now be released this week, but original expectations of it being in excess of US$1tn have been reined in. In a week when America’s Covid-19 infections passed 4 million and the number of deaths rose to nearly 150,000, the delays were hardly constructive, especially as new jobless claims still exceeded 1 million.

The coming week will see the full extent of the economic devastation wrought by Covid-19 lockdowns on the US in the second quarter, with the consensus estimate being for the US economy to contract by almost 35 per cent on a quarter-on-quarter seasonally adjusted annualised basis.

However, beyond the optics of the EU making progress on fiscal integration and the US being frustrated by gridlock, what should not be overlooked is that overall US fiscal impulse this year is at nearly 12 per cent of gross domestic product, far outweighing that of the eurozone, which will really only start in 2021.

And it is for this reason that the US dollar is struggling; not that the US is falling behind Europe in its coronavirus response. With the US 10-year Treasury yield slipping to 0.58 per cent last week, not far from the record low of 0.54 per cent posted in March, and with the 10-year real yield at its lowest level since 2012, it is not surprising the US dollar fell nor that the euro rallied along with most other currencies.

The US budget deficit is on track to reach 20 per cent of US GDP in the current fiscal year, while its debt-to-GDP will rise above 100 per cent. With US real yields negative, even with market risk aversion coming back, it is getting increasingly hard for the US dollar to benefit, let alone resist encouraging eurozone news.

Tim Fox is a prominent regional economist and financial market analyst

Price, base / as tested From Dh173,775 (base model)
Engine 2.0-litre 4cyl turbo, AWD
Power 249hp at 5,500rpm
Torque 365Nm at 1,300-4,500rpm
Gearbox Nine-speed auto
Fuel economy, combined 7.9L/100km

Global state-owned investor ranking by size

1.

United States

2.

China

3.

UAE

4.

Japan

5

Norway

6.

Canada

7.

Singapore

8.

Australia

9.

Saudi Arabia

10.

South Korea

Tesalam Aleik

Abdullah Al Ruwaished

(Rotana)

Ferrari 12Cilindri specs

Engine: naturally aspirated 6.5-liter V12

Power: 819hp

Torque: 678Nm at 7,250rpm

Price: From Dh1,700,000

Available: Now

THE SPECS – Honda CR-V Touring AWD

Engine: 2.4-litre 4-cylinder

Power: 184hp at 6,400rpm

Torque: 244Nm at 3,900rpm

Transmission: Continuously Variable Transmission (CVT)

0-100kmh in 9.4 seconds

Top speed: 202kmh

Fuel consumption: 6.8L/100km

Price: From Dh122,900

Pearls on a Branch: Oral Tales
​​​​​​​Najlaa Khoury, Archipelago Books

Who was Alfred Nobel?

The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.

  • In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
  • Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
  • Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
The Perfect Couple

Starring: Nicole Kidman, Liev Schreiber, Jack Reynor

Creator: Jenna Lamia

Rating: 3/5

The specs

Price, base / as tested Dh1,470,000 (est)
Engine 6.9-litre twin-turbo W12
Gearbox eight-speed automatic
Power 626bhp @ 6,000rpm
Torque: 900Nm @ 1,350rpm
Fuel economy, combined 14.0L / 100km

How to join and use Abu Dhabi’s public libraries

• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.

• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.

• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.

• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.

• For more information visit the library network's website.

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

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
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.

EPL's youngest
  • Ethan Nwaneri (Arsenal)
    15 years, 181 days old
  • Max Dowman (Arsenal)
    15 years, 235 days old
  • Jeremy Monga (Leicester)
    15 years, 271 days old
  • Harvey Elliott (Fulham)
    16 years, 30 days old
  • Matthew Briggs (Fulham)
    16 years, 68 days old
FROM%20THE%20ASHES
%3Cp%3EDirector%3A%20Khalid%20Fahad%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Shaima%20Al%20Tayeb%2C%20Wafa%20Muhamad%2C%20Hamss%20Bandar%3C%2Fp%3E%0A%3Cp%3ERating%3A%203%2F5%3C%2Fp%3E%0A
West Indies v England ODI series:

West Indies squad: Jason Holder (c), Fabian Allen, Devendra Bishoo, Darren Bravo, Chris Gayle, Shimron Hetmyer, Shai Hope, Evin Lewis, Ashley Nurse, Keemo Paul, Nicholas Pooran, Rovman Powell, Kemar Roach, Oshane Thomas.

Fixtures:

1st ODI - February 20, Bridgetown

2nd ODI - February 22, Bridgetown

3rd ODI - February 25, St George's

4th ODI - February 27, St George's

5th ODI - March 2, Gros Islet

The specs: 2019 Lincoln MKC

Price, base / as tested: Dh169,995 / Dh192,045

Engine: Turbocharged, 2.0-litre, in-line four-cylinder

Transmission: Six-speed automatic

Power: 253hp @ 5,500rpm

Torque: 389Nm @ 2,500rpm

Fuel economy, combined: 10.7L / 100km

Rankings

ATP: 1. Novak Djokovic (SRB) 10,955 pts; 2. Rafael Nadal (ESP) 8,320; 3. Alexander Zverev (GER) 6,475 ( 1); 5. Juan Martin Del Potro (ARG) 5,060 ( 1); 6. Kevin Anderson (RSA) 4,845 ( 1); 6. Roger Federer (SUI) 4,600 (-3); 7. Kei Nishikori (JPN) 4,110 ( 2); 8. Dominic Thiem (AUT) 3,960; 9. John Isner (USA) 3,155 ( 1); 10. Marin Cilic (CRO) 3,140 (-3)

WTA: 1. Naomi Osaka (JPN) 7,030 pts ( 3); 2. Petra Kvitova (CZE) 6,290 ( 4); 3. Simona Halep (ROM) 5,582 (-2); 4. Sloane Stephens (USA) 5,307 ( 1); 5. Karolina Pliskova (CZE) 5,100 ( 3); 6. Angelique Kerber (GER) 4,965 (-4); 7. Elina Svitolina (UKR) 4,940; 8. Kiki Bertens (NED) 4,430 ( 1); 9. Caroline Wozniacki (DEN) 3,566 (-6); 10. Aryna Sabalenka (BLR) 3,485 ( 1)

Getting%20there
%3Cp%3EGiven%20its%20remote%20location%2C%20getting%20to%20Borneo%20can%20feel%20daunting%20even%20for%20the%20most%20seasoned%20traveller.%20But%20you%20can%20fly%20directly%20from%20Kuala%20Lumpur%20to%20Sandakan%20and%20Sepilok%20is%20only%20half%20an%20hour%20away%20by%20taxi.%20Sandakan%20has%20plenty%20of%20accommodation%20options%2C%20while%20Sepilok%20has%20a%20few%20nature%20lodges%20close%20to%20the%20main%20attractions.%3C%2Fp%3E%0A
GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

Crops that could be introduced to the UAE

1: Quinoa 

2. Bathua 

3. Amaranth 

4. Pearl and finger millet 

5. Sorghum

The Sand Castle

Director: Matty Brown

Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea

Rating: 2.5/5

LA LIGA FIXTURES

Friday Valladolid v Osasuna (Kick-off midnight UAE)

Saturday Valencia v Athletic Bilbao (5pm), Getafe v Sevilla (7.15pm), Huesca v Alaves (9.30pm), Real Madrid v Atletico Madrid (midnight)

Sunday Real Sociedad v Eibar (5pm), Real Betis v Villarreal (7.15pm), Elche v Granada (9.30pm), Barcelona v Levante (midnight)

Monday Celta Vigo v Cadiz (midnight)

LILO & STITCH

Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders

Director: Dean Fleischer Camp

Rating: 4.5/5

RESULTS

5pm: Sheikh Mansour bin Zayed Al Nahyan Racing Festival Purebred Arabian Cup Conditions (PA) Dh 200,000 (Turf) 1,600m
Winner: Hameem, Adrie de Vries (jockey), Abdallah Al Hammadi (trainer)
5.30pm: Sheikha Fatima bint Mubarak Cup Conditions (PA) Dh 200,000 (T) 1,600m
Winner: Winked, Connor Beasley, Abdallah Al Hammadi
6pm: Sheikh Sultan bin Zayed Al Nahyan National Day Cup Listed (TB) Dh 380,000 (T) 1,600m
Winner: Boerhan, Ryan Curatolo, Nicholas Bachalard
6.30pm: Sheikh Sultan bin Zayed Al Nahyan National Day Group 3 (PA) Dh 500,000 (T) 1,600m
Winner: AF Alwajel, Tadhg O’Shea, Ernst Oertel
7pm: Sheikh Sultan bin Zayed Al Nahyan National Day Jewel Crown Group 1 (PA) Dh 5,000,000 (T) 2,200m
Winner: Messi, Pat Dobbs, Timo Keersmaekers
7.30pm: Sheikh Mansour bin Zayed Al Nahyan Racing Festival Handicap (PA) Dh 150,000 (T) 1,400m
Winner: Harrab, Ryan Curatolo, Jean de Roualle
8pm: Wathba Stallions Cup Handicap (PA) Dh 100,000 (T) 1,400m
Winner: AF Alareeq, Connor Beasley, Ahmed Al Mehairbi

The bio

Favourite food: Japanese

Favourite car: Lamborghini

Favourite hobby: Football

Favourite quote: If your dreams don’t scare you, they are not big enough

Favourite country: UAE

Specs

Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request

Famous left-handers

- Marie Curie

- Jimi Hendrix

- Leonardo Di Vinci

- David Bowie

- Paul McCartney

- Albert Einstein

- Jack the Ripper

- Barack Obama

- Helen Keller

- Joan of Arc

In numbers

1,000 tonnes of waste collected daily:

  • 800 tonnes converted into alternative fuel
  • 150 tonnes to landfill
  • 50 tonnes sold as scrap metal

800 tonnes of RDF replaces 500 tonnes of coal

Two conveyor lines treat more than 350,000 tonnes of waste per year

25 staff on site

 

Top 5 concerns globally:

1. Unemployment

2. Spread of infectious diseases

3. Fiscal crises

4. Cyber attacks

5. Profound social instability

Top 5 concerns in the Mena region

1. Energy price shock

2. Fiscal crises

3. Spread of infectious diseases

4. Unmanageable inflation

5. Cyber attacks

Source: World Economic Foundation

Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
Rating: 2/5
 
Tips for SMEs to cope
  • Adapt your business model. Make changes that are future-proof to the new normal
  • Make sure you have an online presence
  • Open communication with suppliers, especially if they are international. Look for local suppliers to avoid delivery delays
  • Open communication with customers to see how they are coping and be flexible about extending terms, etc
    Courtesy: Craig Moore, founder and CEO of Beehive, which provides term finance and working capital finance to SMEs. Only SMEs that have been trading for two years are eligible for funding from Beehive.