Risk appetite was hit hard this past week as a new round of US led sanctions on Turkey spooked global markets.
After several months of finding staunch resistance in the channel between 95 and 95.50, the dollar index now finds itself comfortably trading above 96 levels. While the move higher has been much delayed it is curious that it wasn’t the actions of the US Federal Open Market Commitee or the ongoing trade wars with China that sparked this move higher.
This bodes well for those dollar longs who have been waiting for months for a break of that key level at 95 which is now seen as a strong support level.
Off the back of these developments, the yen continued strengthening as a risk off currency and the dollar strength has also seen Gold move below $1,200 levels on the Dubai Gold & Commodities Exchange (DGCX).
While our downside targets given in my last publication were fulfilled at $1,204, I maintain my bearish view in the yellow metal and expect to see a strong test of $1,180 levels in the next two weeks, while upside resistance will hold at $1,220 levels in the weeks ahead.
The recent moves in the US dollar index will promise further downsides in currencies such as EUR/USD and GBP/USD which were also hit hard in trading last week.
DGCX’s EUR/USD contract has sunk to 9 month lows at 1.14 levels and more weakness is expected to take the cross down to test 1.11 levels within the next few weeks.
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Read more:
Iran's gold demand triples as investors seek safe haven before US sanctions
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The economic calendar takes a breather this week following back to back weeks of high level releases. It’s particular quiet on the North American calendar with all the key releases coming from the UK this week.
UK inflation due out on Tuesday will be a key driver in GBP pricing following the hike in interest rates this month. It was surprising to see the Bank of England hike rates at this past meeting, and perhaps even more surprising the the unanimous 9-0 vote to hike rates. Despite the announcement the pound sold off in the hours following the announcement which signifies that despite the most recent rate hike sterling is primed for more downsides.
These data points will form only a small part of pound pricing with the breakdown of ongoing Brexit talks being the main driver of sterling volatility. Amid these developments, the pound has fallen to uncharted territory this year – at the time of writing Cable has sunk to 14 month lows.
With the pound currently trading above 1.2750 levels against the Greenback on DGCX, expect to see a move downwards towards 1.23 levels in the week ahead.
Judging by the recent geopolitical events it is fairly safe to say that global financial markets are entering a period of uncertainty at best.
With the aforementioned sanctions and trade war rhetoric, the risk off environment will thrive through the third quarter of 2018. It would thus prove prudent to continue to explore long opportunities in the US dollar and the Japanese yen.
Expect to see continued downsides in crosses such as EUR/JPY and GBP/JPY while upsides will continue to also prevail in commodity currencies such as the U*S dollar versus the Canadian dollar.
And with no major data releases due out on the economic calendar next week, these issues will continue to dictate investor sentiment.
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Engine: 3.0-litre twin-turbo V6 and electric motor
Max power: 700hp at 7,500rpm
Max torque: 720Nm at 2,250rpm
Transmission: Eight-speed dual-clutch auto
0-100km/h: 3.0sec
Top speed: 330kph
Price: From Dh1.14 million ($311,000)
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The Gentlemen
Director: Guy Ritchie
Stars: Colin Farrell, Hugh Grant
Three out of five stars
The BIO:
He became the first Emirati to climb Mount Everest in 2011, from the south section in Nepal
He ascended Mount Everest the next year from the more treacherous north Tibetan side
By 2015, he had completed the Explorers Grand Slam
Last year, he conquered K2, the world’s second-highest mountain located on the Pakistan-Chinese border
He carries dried camel meat, dried dates and a wheat mixture for the final summit push
His new goal is to climb 14 peaks that are more than 8,000 metres above sea level
Dubai works towards better air quality by 2021
Dubai is on a mission to record good air quality for 90 per cent of the year – up from 86 per cent annually today – by 2021.
The municipality plans to have seven mobile air-monitoring stations by 2020 to capture more accurate data in hourly and daily trends of pollution.
These will be on the Palm Jumeirah, Al Qusais, Muhaisnah, Rashidiyah, Al Wasl, Al Quoz and Dubai Investment Park.
“It will allow real-time responding for emergency cases,” said Khaldoon Al Daraji, first environment safety officer at the municipality.
“We’re in a good position except for the cases that are out of our hands, such as sandstorms.
“Sandstorms are our main concern because the UAE is just a receiver.
“The hotspots are Iran, Saudi Arabia and southern Iraq, but we’re working hard with the region to reduce the cycle of sandstorm generation.”
Mr Al Daraji said monitoring as it stood covered 47 per cent of Dubai.
There are 12 fixed stations in the emirate, but Dubai also receives information from monitors belonging to other entities.
“There are 25 stations in total,” Mr Al Daraji said.
“We added new technology and equipment used for the first time for the detection of heavy metals.
“A hundred parameters can be detected but we want to expand it to make sure that the data captured can allow a baseline study in some areas to ensure they are well positioned.”
Company Profile
Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8
Moonfall
Director: Rolan Emmerich
Stars: Patrick Wilson, Halle Berry
Rating: 3/5
COMPANY PROFILE
Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)
SPECS
Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
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SPECS
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
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When is VAR used?
• Goals
• Penalty decisions
• Direct red-card incidents
• Mistaken identity
The specs
Engine: 1.5-litre, 4-cylinder turbo
Transmission: CVT
Power: 170bhp
Torque: 220Nm
Price: Dh98,900
Mohammed bin Zayed Majlis
The specs: 2019 GMC Yukon Denali
Price, base: Dh306,500
Engine: 6.2-litre V8
Transmission: 10-speed automatic
Power: 420hp @ 5,600rpm
Torque: 621Nm @ 4,100rpm
Fuel economy, combined: 12.9L / 100km
UAE rugby in numbers
5 - Year sponsorship deal between Hesco and Jebel Ali Dragons
700 - Dubai Hurricanes had more than 700 playing members last season between their mini and youth, men's and women's teams
Dh600,000 - Dubai Exiles' budget for pitch and court hire next season, for their rugby, netball and cricket teams
Dh1.8m - Dubai Hurricanes' overall budget for next season
Dh2.8m - Dubai Exiles’ overall budget for next season