A host of key US data releases along with geopolitical developments dictated market sentiments through June, causing the US Dollar Index to end the month half a per cent lower.
The US Dollar Index, which tracks the value of the dollar against a basket of currencies, including the euro, yen and pound, touched a three-month high at 81.00 but pared any gains to close marginally above 80.00 as developments from the US Federal Reserve and the US economic docket kept investors cautious on the near-term outlook of the US economy.
In her most recent testimony, Fed chairwoman Janet Yellen adopted a rather dovish tone towards future interest rates and indicated that the Fed remains committed to keeping rates low to stimulate economic growth in the US. The dovish views underpinned market sentiment that the US recovery still remains rather sensitive – and this was reinforced by a rather dismal first-quarter US GDP reading which shrank -2.9 per cent (expected -1.8 per cent/previous -1 per cent).
It was the worst reading since the first quarter of 2009 – but perhaps more alarming was the fall in the personal consumption figures in June. Personal consumption, a measure of household spending on durable, non-durable goods and services (essentially spending which makes up 75 per cent of the US GDP reading), sank to 1 per cent (expected 2.4 per cent/previous 3.1 per cent).
Previously, colder weather was blamed for slower spending, however, with consumer numbers weakening through spring and the start of summer, following a rather robust period in the winter, it is obvious the recent slowdown extends past weather-related issues.
The US non-farm payrolls report due out on Thursday will continue to dictate sentiment of the US recovery. A reading above 210,000, as expected, would re-instil some short-term confidence following that disastrous GDP reading – however key to the report will be the revisions to the previous month’s readings.
We would need to see a nice upward revision in May’s report to reaffirm that the US jobs recovery is holding and remains true. An upward revision of at least 30,000 in May’s report would reaffirm the strengthening of the US jobs market. Also key to the report will be the labour force participation rate. Through the fourth quarter of 2013, drops in the overall US unemployment rate were as a result of a shrinking labour force. Therefore, we would need to see the labour force participation rate holding at the very least to continue to reaffirm the stability of the jobs market.
Oil prices continued to thrive on deteriorating geopolitical developments to close the month more than 2 per cent higher. The West Texas Intermediate crude contract moved north of US$105 a barrel as the escalation in Iraq and the failed ceasefire in Ukraine along with the most recent missile launches from North Korea rattled investor sentiment. We can expect energy prices to remain elevated through the summer months, with resistance at $110 expected to hold. Also benefiting from political developments was the Japanese yen, which strengthened following an increased flow into safe haven asset buying. The yen, the major currency with the lowest interest rate among the G7 bloc, closed near seven-month lows against the dollar.
Increasing oil prices weighed down the prospects of the Indian rupee during June. With India importing close to 80 per cent of its oil needs, increasing prices have resulted in the trade deficit widening to more than $11 billion, the highest in 10 months. They have also increased inflation pressures, with the most reading coming in at 6.01 per cent during June. These combined factors have involved the rupee dropping more than 1 per cent against the dollar. The rupee should consolidate at the current levels, with resistance coming in at 61.30.
And finally, perhaps the star on the month was the Chinese yuan. The currency closed the month with the largest monthly gain of the year as improved optimism regarding growth in China turned investor sentiment bullish about the second largest economy. Also benefiting on the news was the Australian dollar, which gained 1 per cent on the month. It has now recorded five consecutive months of higher closings, a period in which the currency has gained 7.24 per cent.
Gaurav Kashyap is the head of futures at Alpari Middle East
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Company Profile
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Plan to boost public schools
A major shake-up of government-run schools was rolled out across the country in 2017. Known as the Emirati School Model, it placed more emphasis on maths and science while also adding practical skills to the curriculum.
It was accompanied by the promise of a Dh5 billion investment, over six years, to pay for state-of-the-art infrastructure improvements.
Aspects of the school model will be extended to international private schools, the education minister has previously suggested.
Recent developments have also included the introduction of moral education - which public and private schools both must teach - along with reform of the exams system and tougher teacher licensing requirements.
Emergency phone numbers in the UAE
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
Brief scoreline:
Manchester United 1
Mata 11'
Chelsea 1
Alonso 43'
What is graphene?
Graphene is a single layer of carbon atoms arranged like honeycomb.
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But as they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment had led to graphene being isolated for the very first time.
At the time, many believed it was impossible for such thin crystalline materials to be stable. But examined under a microscope, the material remained stable, and when tested was found to have incredible properties.
It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.
But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties.
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
Abu Dhabi GP weekend schedule
Friday
First practice, 1pm
Second practice, 5pm
Saturday
Final practice, 2pm
Qualifying, 5pm
Sunday
Etihad Airways Abu Dhabi Grand Prix (55 laps), 5.10pm
UAE SQUAD
Jemma Eley, Maria Michailidou, Molly Fuller, Chloe Andrews (of Dubai College), Eliza Petricola, Holly Guerin, Yasmin Craig, Caitlin Gowdy (Dubai English Speaking College), Claire Janssen, Cristiana Morall (Jumeirah English Speaking School), Tessa Mies (Jebel Ali School), Mila Morgan (Cranleigh Abu Dhabi).
Herc's Adventures
Developer: Big Ape Productions
Publisher: LucasArts
Console: PlayStation 1 & 5, Sega Saturn
Rating: 4/5
VERSTAPPEN'S FIRSTS
Youngest F1 driver (17 years 3 days Japan 2014)
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Abdul Jabar Qahraman was meeting supporters in his campaign office in the southern Afghan province of Helmand when a bomb hidden under a sofa exploded on Wednesday.
The blast in the provincial capital Lashkar Gah killed the Afghan election candidate and at least another three people, Interior Minister Wais Ahmad Barmak told reporters. Another three were wounded, while three suspects were detained, he said.
The Taliban – which controls much of Helmand and has vowed to disrupt the October 20 parliamentary elections – claimed responsibility for the attack.
Mr Qahraman was at least the 10th candidate killed so far during the campaign season, and the second from Lashkar Gah this month. Another candidate, Saleh Mohammad Asikzai, was among eight people killed in a suicide attack last week. Most of the slain candidates were murdered in targeted assassinations, including Avtar Singh Khalsa, the first Afghan Sikh to run for the lower house of the parliament.
The same week the Taliban warned candidates to withdraw from the elections. On Wednesday the group issued fresh warnings, calling on educational workers to stop schools from being used as polling centres.
