The US Dollar Index, a measure of the value of the greenback against a weighted basket of major currencies, fell below 104 this week and was testing a key support level at 103.4, the lowest since June, at the time of writing.
The move was exacerbated by China reopening its borders at the weekend, fuelling optimism that it would boost the country's economic activity and resulting in higher markets in Asia and Europe.
Looking ahead, markets will continue to focus on the US inflationary situation, with Consumer Price Index data — a key measure of US inflation — due on January 12.
Markets are poised for another slowing inflation print, with the annual CPI expected to fall to 6.5 per cent in December, from 7.1 per cent in November.
Core CPI prices (excluding food and energy) are expected to slow annually to 5.7 per cent, from 6 per cent in November.
This would be the sixth consecutive lower CPI print, following inflation peaking at 9.1 per cent in June last year.
Slowing inflation will stoke further speculation that the US Federal Reserve will slow its pace of interest rate increases, which will ultimately lead to a weaker dollar and more appreciation of asset classes against the greenback.
We saw this during last Friday’s US non-farm payrolls report, which was mixed at best.
But markets rallied on the news that average hourly earnings slowed to 0.3 per cent month on month and 4.6 per cent year on year (versus forecasts of 0.4 per cent and 5 per cent, respectively).
The weakening wage growth drove up equities, with the US dollar continuing to sink on Friday, which started the short-term bull rally we find ourselves in.
This could quickly change with Thursday’s inflation report.
It is also the start of fourth-quarter earnings season in the US, with banking heavyweights Wells Fargo, Bank of America and JP Morgan Chase leading the way with their announcements this week.
Despite higher-than-expected inflation, a cooling in earnings reports could irk markets with fears of a potential recession.
Overall, the theme of good news being bad for markets and bad news being good for markets (equities and asset classes against the US dollar) is set to continue.
In addition to the above fundamentals, the US Dollar Index also looks susceptible.
Watch: US Federal Reserve chief warns of 'pain' in reducing inflation
After breaking through the 50-week moving average in December, the index has found resistance in moving back above 104.4 levels, with 103.4 a more likely level to be tested.
Across the pond, we have a relatively light economic calendar for the euro area.
The EUR/USD currency pair has benefitted from the recent downwards dollar move and the common currency looks to test a key resistance level between 1.0740 and 1.0770, which has not been seen since May.
Overall, I would continue to exercise caution amid the current market turbulence.
Waiting for the inflation report on Thursday may prove prudent before building any medium-term trading strategies.
Gaurav Kashyap is risk manager at Equiti Securities Currencies Brokers. The views and opinions expressed in this article are those of the author and do not reflect the views of Equiti Securities Currencies Brokers
Sanju
Produced: Vidhu Vinod Chopra, Rajkumar Hirani
Director: Rajkumar Hirani
Cast: Ranbir Kapoor, Vicky Kaushal, Paresh Rawal, Anushka Sharma, Manish’s Koirala, Dia Mirza, Sonam Kapoor, Jim Sarbh, Boman Irani
Rating: 3.5 stars
Three ways to boost your credit score
Marwan Lutfi says the core fundamentals that drive better payment behaviour and can improve your credit score are:
1. Make sure you make your payments on time;
2. Limit the number of products you borrow on: the more loans and credit cards you have, the more it will affect your credit score;
3. Don't max out all your debts: how much you maximise those credit facilities will have an impact. If you have five credit cards and utilise 90 per cent of that credit, it will negatively affect your score.
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Emirates flies from Dubai to Seattle from Dh5,555 return, including taxes. Portland is a 260 km drive from Seattle and Emirates offers codeshare flights to Portland with its partner Alaska Airlines.
The car
Hertz (www.hertz.ae) offers compact car rental from about $300 per week, including taxes. Emirates Skywards members can earn points on their car hire through Hertz.
Parks and accommodation
For information on Crater Lake National Park, visit www.nps.gov/crla/index.htm. Because of the altitude, large parts of the park are closed in winter due to snow. While the park’s summer season is May 22-October 31, typically, the full loop of the Rim Drive is only possible from late July until the end of October. Entry costs $25 per car for a day. For accommodation, see www.travelcraterlake.com. For information on Umpqua Hot Springs, see www.fs.usda.gov and https://soakoregon.com/umpqua-hot-springs/. For Bend, see https://www.visitbend.com/.
2:01:39: Eliud Kipchoge (KEN) on 16/9/19 in Berlin
2:02:57: Dennis Kimetto (KEN) on 28/09/2014 in Berlin
2:03:23: Wilson Kipsang (KEN) on 29/09/2013 in Berlin
2:03:38: Patrick Makau (KEN) on 25/09/2011 in Berlin
2:03:59: Haile Gebreselassie (ETH) on 28/09/2008 in Berlin
2:04:26: Haile Gebreselassie (ETH) on 30/09/2007 in Berlin
2:04:55: Paul Tergat (KEN) on 28/09/2003 in Berlin
2:05:38: Khalid Khannouchi (USA) 14/04/2002 in London
2:05:42: Khalid Khannouchi (USA) 24/10/1999 in Chicago
2:06:05: Ronaldo da Costa (BRA) 20/09/1998 in Berlin
THE SPECS
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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
THE 12 BREAKAWAY CLUBS
England
Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, Tottenham Hotspur
Italy
AC Milan, Inter Milan, Juventus
Spain
Atletico Madrid, Barcelona, Real Madrid
UAE SQUAD
Omar Abdulrahman (Al Hilal), Ali Khaseif, Ali Mabkhout, Salem Rashed, Khalifa Al Hammadi, Khalfan Mubarak, Zayed Al Ameri, Mohammed Al Attas (Al Jazira), Khalid Essa, Ahmed Barman, Ryan Yaslam, Bandar Al Ahbabi (Al Ain), Habib Fardan, Tariq Ahmed, Mohammed Al Akbari (Al Nasr), Ali Saleh, Ali Salmin (Al Wasl), Adel Al Hosani, Ali Hassan Saleh, Majed Suroor (Sharjah), Ahmed Khalil, Walid Abbas, Majed Hassan, Ismail Al Hammadi (Shabab Al Ahli), Hassan Al Muharrami, Fahad Al Dhahani (Bani Yas), Mohammed Al Shaker (Ajman)
Open Men (bonus points in brackets)
New Zealand 125 (1) beat UAE 111 (3)
India 111 (4) beat Singapore 75 (0)
South Africa 66 (2) beat Sri Lanka 57 (2)
Australia 126 (4) beat Malaysia -16 (0)
Open Women
New Zealand 64 (2) beat South Africa 57 (2)
England 69 (3) beat UAE 63 (1)
Australia 124 (4) beat UAE 23 (0)
New Zealand 74 (2) beat England 55 (2)
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Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
The Al Barzakh Festival takes place on Wednesday and Thursday at 7.30pm in the Red Theatre, NYUAD, Saadiyat Island. Tickets cost Dh105 for adults from platinumlist.net
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
