A greater likelihood of a Federal Reserve interest rate hike this year took a US dollar index closer to an 11-year high on Thursday, with analysts suggesting a further strengthening in the months ahead.
The Dollar Index, which tracks the greenback against a basket of six major currencies, rose 0.2 per cent to 98.14. The index is up more than 8 per cent year-to-date and 23 per cent in the past 52 weeks. Against the euro, the dollar rose to $1.08.
But the response from regional stock markets was muted. The Dubai index dropped by 0.19 per cent for a second consecutive day of declines. The Abu Dhabi market fell 0.21 per cent, closing lower for the first time this week.
On Wednesday, the Federal Open Market Committee released minutes from its March 17 and March 18 meeting acknowledging slowing economic growth worldwide, but said it was still planning an interest rate hike this year, which could further strengthen the dollar.
Fed officials who pushed to lift benchmark rates in June were countered by others saying a stronger dollar would combine with declines in energy prices to curb inflation.
“It is important to watch the dollar index level, especially as it approaches the 101.70 mark, as it represents a cyclical resistance point, and in our estimation there is a low probability of it breaking above this level unless the Fed raises the rates,” said Nour Eldeen Al Hammoury, the chief market strategist at ADS Securities in Abu Dhabi.
“Going through this mark could signal the start of a further strengthening of the dollar,” said Mr Al Hammoury.
The UAE is poised to both benefit and suffer from a more expensive dollar.
“The dirham/dollar peg is opening up investment opportunities both in Europe and Asia, [but] the downside will be for UAE exports and the tourism sector,” Mr Al Hammoury said.
As the strengthening dollar makes American goods and services more expensive than elsewhere, it also reduces the value of US corporate profits from overseas operations. In 2012, the S&P 500 companies that provided details on foreign sales showed that almost 47 per cent of total sales came from abroad.
“The strong dollar may well impact a number of large US companies that compete in world markets,” said Pradeep Unni, the head of trading for commodities and currencies at Richcomm Global in Dubai. “Many Arab nationals have investments in US stock markets, and any such decline will only hurt their profit.”
ssahoo@thenational.ae
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
|
Zayed Sustainability Prize
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 247hp at 6,500rpm
Torque: 370Nm from 1,500-3,500rpm
Transmission: 10-speed auto
Fuel consumption: 7.8L/100km
Price: from Dh94,900
On sale: now
Brolliology: A History of the Umbrella in Life and Literature
By Marion Rankine
Melville House
How has net migration to UK changed?
The figure was broadly flat immediately before the Covid-19 pandemic, standing at 216,000 in the year to June 2018 and 224,000 in the year to June 2019.
It then dropped to an estimated 111,000 in the year to June 2020 when restrictions introduced during the pandemic limited travel and movement.
The total rose to 254,000 in the year to June 2021, followed by steep jumps to 634,000 in the year to June 2022 and 906,000 in the year to June 2023.
The latest available figure of 728,000 for the 12 months to June 2024 suggests levels are starting to decrease.
Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
((Disclaimer))
The Liechtensteinische Landesbank AG (“Bank”) assumes no liability or guarantee for the accuracy, balance, or completeness of the information in this publication. The content may change at any time due to given circumstances, and the Liechtensteinische Landesbank AG is under no obligation to update information once it has been published. This publication is intended for information purposes only and does not constitute an offer, a recommendation or an invitation by, or on behalf of, Liechtensteinische Landesbank (DIFC Branch), Liechtensteinische Landesbank AG, or any of its group affiliates to make any investments or obtain services. This publication has not been reviewed, disapproved or approved by the United Arab Emirates (“UAE”) Central Bank, Dubai Financial Services Authority (“DFSA”) or any other relevant licensing authorities in the UAE. It may not be relied upon by or distributed to retail clients. Liechtensteinische Landesbank (DIFC Branch) is regulated by the DFSA and this advertorial is intended for Professional Clients (as defined by the DFSA) who have sufficient financial experience and understanding of financial markets, products or transactions and any associated risks.
Dengue%20fever%20symptoms
%3Cp%3EHigh%20fever%20(40%C2%B0C%2F104%C2%B0F)%3Cbr%3ESevere%20headache%3Cbr%3EPain%20behind%20the%20eyes%3Cbr%3EMuscle%20and%20joint%20pains%3Cbr%3ENausea%3Cbr%3EVomiting%3Cbr%3ESwollen%20glands%3Cbr%3ERash%26nbsp%3B%3C%2Fp%3E%0A
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
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Sunday's games
Liverpool v West Ham United, 4.30pm (UAE)
Southampton v Burnley, 4.30pm
Arsenal v Manchester City, 7pm
