The weakness in the US dollar has continued through to the start of the third quarter, with improving US economic data – dominated by cooling inflation – hitting forecasts hard for the greenback.
At the time of writing, the US Dollar Index, a measure of the value of the dollar against a weighted basket of major currencies, was trading below 100, down by about 3 per cent in July.
Since we last spoke, inflation fears continue to retreat; the most recent Consumer Price Index and Producer Price Index reports showed that price pressures came in at 3 per cent and 0.1 per cent year on year, respectively (versus 4 per cent and 0.9 per cent previously).
Watch: US Federal Reserve raises interest rates for 10th consecutive time
The most recent payrolls report released on July 7 showed that only 209,000 jobs were added in June, well below the expected 225,000 jobs.
So much of the US Federal Reserve's expectations regarding future rates has been dictated by inflation and employment and with July’s data showing continued signs of cooling on both fronts, we are now in a situation where we find the US dollar under heavy selling pressure.
Whether this proves to be premature remains to be seen.
One thing we know for sure is that come the next Fed meeting, which concludes on July 26, we will have another interest rate increase, taking the overall rate to 5.5 per cent.
According to the CME Group’s FedWatch Tool, markets are already pricing this in with a 96 per cent certainty.
The easing inflation threat and cooling US jobs market then begs the question: Other than July, will the Fed look at one or two more rate increases in 2023?
Or could we be in situation whereby we will not have another rate increase in 2023 following July’s action?
Looking ahead and using the same CME tool, markets are pricing in an 83 per cent chance of a hold during the September meeting, a 67 per cent hold in November and a 58 per cent chance that rates will end the year at 5.5 per cent in December.
It will be interesting to see how these values change over the course of the next few weeks and months – and will be entirely reliant on the coming US data.
Softening inflation and the labour market will continue to put pressure on the US dollar. As a result, there will be more upside for major currencies against the greenback and also upwards momentum in US stocks.
With so much of the fundamental picture dependent on data, technicals may provide a bit of clarity when it comes to how low the US Dollar Index could fall.
Following the psychological break of the 100 level, near-term support in the index kicks in at 99.30 levels – and a break of this could expose a level of 96.30 before we begin the fourth quarter.
Keep an eye on the US jobless claims on Thursday, which shows how many people file for unemployment benefits every week in the US.
Any falling number will lead to dollar weakness in the short term and vice versa.
This will precede the July Fed meeting, which concludes on Wednesday night, with the decision due out at 10pm Dubai time.
Pay attention to forward guidance from the Fed. While recent speakers have continued to allude to the inflation threat, this message could be repeated.
However, I do believe markets will shrug it off and continue piling into higher-yielding assets, which will keep the dollar under pressure.
Meanwhile, earnings season is in full flow and will, no doubt, be critical to future guidance of equity pricing.
On Wednesday, Tesla, Netflix and IBM will announce their results after market close.
Microsoft and Google owner Alphabet will announce their results next Tuesday, followed by Meta on July 26 and Amazon on July 27.
Again, it is important to note that markets have already priced in a weaker earnings season.
Earnings are expected to drop by more than 7 per cent to their lowest since 2020, so it is best to focus on companies' comments on their views of forward guidance.
How to help or find other cats to adopt
RESULTS
Catchweight 82kg
Piotr Kuberski (POL) beat Ahmed Saeb (IRQ) by decision.
Women’s bantamweight
Corinne Laframboise (CAN) beat Cornelia Holm (SWE) by unanimous decision.
Welterweight
Omar Hussein (PAL) beat Vitalii Stoian (UKR) by unanimous decision.
Welterweight
Josh Togo (LEB) beat Ali Dyusenov (UZB) by unanimous decision.
Flyweight
Isaac Pimentel (BRA) beat Delfin Nawen (PHI) TKO round-3.
Catchweight 80kg
Seb Eubank (GBR) beat Emad Hanbali (SYR) KO round 1.
Lightweight
Mohammad Yahya (UAE) beat Ramadan Noaman (EGY) TKO round 2.
Lightweight
Alan Omer (GER) beat Reydon Romero (PHI) submission 1.
Welterweight
Juho Valamaa (FIN) beat Ahmed Labban (LEB) by unanimous decision.
Featherweight
Elias Boudegzdame (ALG) beat Austin Arnett (USA) by unanimous decision.
Super heavyweight
Maciej Sosnowski (POL) beat Ibrahim El Sawi (EGY) by submission round 1.
Western Region Asia Cup T20 Qualifier
Sun Feb 23 – Thu Feb 27, Al Amerat, Oman
The two finalists advance to the Asia qualifier in Malaysia in August
Group A
Bahrain, Maldives, Oman, Qatar
Group B
UAE, Iran, Kuwait, Saudi Arabia
UAE group fixtures
Sunday Feb 23, 9.30am, v Iran
Monday Feb 25, 1pm, v Kuwait
Tuesday Feb 26, 9.30am, v Saudi
UAE squad
Ahmed Raza, Rohan Mustafa, Alishan Sharafu, Ansh Tandon, Vriitya Aravind, Junaid Siddique, Waheed Ahmed, Karthik Meiyappan, Basil Hameed, Mohammed Usman, Mohammed Ayaz, Zahoor Khan, Chirag Suri, Sultan Ahmed
Contracted list
Ashton Agar, Alex Carey, Pat Cummins, Aaron Finch, Peter Handscomb, Josh Hazlewood, Travis Head, Usman Khawaja, Nathan Lyon, Glenn Maxwell, Shaun Marsh, Mitchell Marsh, Tim Paine, Matt Renshaw, Jhye Richardson, Kane Richardson, Billy Stanlake, Mitchell Starc, Marcus Stoinis, Andrew Tye.
Crazy Rich Asians
Director: Jon M Chu
Starring: Constance Wu, Henry Golding, Michelle Yeon, Gemma Chan
Four stars
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
Mountain%20Boy
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Super Bowl LIII schedule
What Super Bowl LIII
Who is playing New England Patriots v Los Angeles Rams
Where Mercedes-Benz Stadium in Atlanta, United States
When Sunday (start time is 3.30am on Monday UAE time)
The five new places of worship
Church of South Indian Parish
St Andrew's Church Mussaffah branch
St Andrew's Church Al Ain branch
St John's Baptist Church, Ruwais
Church of the Virgin Mary and St Paul the Apostle, Ruwais
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
MATCH INFO
Uefa Champions League quarter-final (first-leg score):
Juventus (1) v Ajax (1), Tuesday, 11pm UAE
Match will be shown on BeIN Sports
Also on December 7 to 9, the third edition of the Gulf Car Festival (www.gulfcarfestival.com) will take over Dubai Festival City Mall, a new venue for the event. Last year's festival brought together about 900 cars worth more than Dh300 million from across the Emirates and wider Gulf region – and that first figure is set to swell by several hundred this time around, with between 1,000 and 1,200 cars expected. The first day is themed around American muscle; the second centres on supercars, exotics, European cars and classics; and the final day will major in JDM (Japanese domestic market) cars, tuned vehicles and trucks. Individuals and car clubs can register their vehicles, although the festival isn’t all static displays, with stunt drifting, a rev battle, car pulls and a burnout competition.
As it stands in Pool A
1. Japan - Played 3, Won 3, Points 14
2. Ireland - Played 3, Won 2, Lost 1, Points 11
3. Scotland - Played 2, Won 1, Lost 1, Points 5
Remaining fixtures
Scotland v Russia – Wednesday, 11.15am
Ireland v Samoa – Saturday, 2.45pm
Japan v Scotland – Sunday, 2.45pm
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
'Champions'
Director: Manuel Calvo
Stars: Yassir Al Saggaf and Fatima Al Banawi
Rating: 2/5
Gertrude Bell's life in focus
A feature film
At one point, two feature films were in the works, but only German director Werner Herzog’s project starring Nicole Kidman would be made. While there were high hopes he would do a worthy job of directing the biopic, when Queen of the Desert arrived in 2015 it was a disappointment. Critics panned the film, in which Herzog largely glossed over Bell’s political work in favour of her ill-fated romances.
A documentary
A project that did do justice to Bell arrived the next year: Sabine Krayenbuhl and Zeva Oelbaum’s Letters from Baghdad: The Extraordinary Life and Times of Gertrude Bell. Drawing on more than 1,000 pieces of archival footage, 1,700 documents and 1,600 letters, the filmmakers painstakingly pieced together a compelling narrative that managed to convey both the depth of Bell’s experience and her tortured love life.
Books, letters and archives
Two biographies have been written about Bell, and both are worth reading: Georgina Howell’s 2006 book Queen of the Desert and Janet Wallach’s 1996 effort Desert Queen. Bell published several books documenting her travels and there are also several volumes of her letters, although they are hard to find in print. Original documents are housed at the Gertrude Bell Archive at the University of Newcastle, which has an online catalogue.
The%20Roundup
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Company%20profile
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Summer special
Hidden killer
Sepsis arises when the body tries to fight an infection but damages its own tissue and organs in the process.
The World Health Organisation estimates it affects about 30 million people each year and that about six million die.
Of those about three million are newborns and 1.2 are young children.
Patients with septic shock must often have limbs amputated if clots in their limbs prevent blood flow, causing the limbs to die.
Campaigners say the condition is often diagnosed far too late by medical professionals and that many patients wait too long to seek treatment, confusing the symptoms with flu.
If you go
The flights
The closest international airport for those travelling from the UAE is Denver, Colorado. British Airways (www.ba.com) flies from the UAE via London from Dh3,700 return, including taxes. From there, transfers can be arranged to the ranch or it’s a seven-hour drive. Alternatively, take an internal flight to the counties of Cody, Casper, or Billings
The stay
Red Reflet offers a series of packages, with prices varying depending on season. All meals and activities are included, with prices starting from US$2,218 (Dh7,150) per person for a minimum stay of three nights, including taxes. For more information, visit red-reflet-ranch.net.
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The specs: 2017 Dodge Ram 1500 Laramie Longhorn
Price, base / as tested: Dhxxx
Engine: 5.7L V8
Transmission: Eight-speed automatic
Power: 395hp @ 5,600rpm
Torque: 556Nm @ 3,950rpm
Fuel economy, combined: 12.7L / 100km
