Illustration by Mathew Kurian
Illustration by Mathew Kurian

Which currency will come out on top in 2018?

The world’s currencies are on an endless roller-coaster ride, their relative values constantly rising and falling in relation to each other, with the occasional stomach-churning drop.

Last year, it was the turn of the US dollar to hurtle downwards, as UAE expats earning dollar-pegged dirhams know to their cost.

The dollar suffered its worst year in a decade, hitting UAE residents with financial commitments in foreign currencies, as their earnings do not travel as far as they did a year ago.

The two big winners of 2017 were the euro, which outpaced almost every other major currency, and the British pound, which was the year’s surprise package, making a partial recovery from the traumatic post-Brexit crash in 2016.

The Japanese yen weakened against most major currencies, while the Chinese yuan and Russian rouble also slipped.

So what does 2018 have in store? Will the dollar surge race back into contention? Will the euro continue to lead the pack? Most intriguingly, what is going to happen to bitcoin, the raciest currency of all?

US dollar

2017 was a bad year for the dollar, which fell about 12 per cent against the euro to end the year trading at around US$1.20.

It was a similar story with the British pound, with the dollar weakening around 8 per cent to close the year at around $1.35, and also falling against everything from the Mexican peso to Swedish krona.

Some saw this as a sign that US economic might is fading, especially with the IMF downgrading its 2018 growth forecast from 2.5 per cent to 2.1 per cent, well below the 3 per cent targeted by the White House.

However, David Hillier, a currency expert at global transfer service Moneycorp, now expects the US dollar to rebound this year, as president Donald Trump’s move to slash corporate tax from 35 per cent right down to 20 per cent inspires US companies to repatriate trillions of dollars held overseas.

“This will heighten demand for the dollar, increase domestic investment and strengthen the economy, all of which should boost the greenback,” he says.

Sheridan Admans, investment manager at The Share Centre, predicts a strong year for the US economy and dollar as Mr Trump’s tax reforms boost company earnings. “This may force new Federal Reserve chair Jerome Powell to raise rates more aggressively than the market expects, and higher interest rates will lift the dollar,” he says.

After a tricky couple of years, dollar and dirham earners could finally get some respite.


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The euro

While the dollar may fight back against many global currencies in 2017 it could struggle to recover lost ground against the buoyant European single currency.

Mr Hillier sees another positive year for the euro. “Political instability in Italy and Germany is easing and economic growth has strengthened across the eurozone, while recent free trade agreements with Canada and Japan should also help.”

The single currency should receive a further boost if the European Central Bank starts to unwind its €1 trillion ($1.2tn) monetary stimulus package as expected, Professor Hillier adds.

Charles Purdy, chief executive of Smart Currency Exchange, suggests the euro could dip against sterling if there is progress in signing a post-Brexit trade deal with the UK. “However, political risk in the eurozone is now falling in stark contrast to the politically-charged atmosphere in the UK, so the euro should remain strong.”


The British pound collapsed by 17 per cent after the shock EU referendum result in 2016 but fought back strongly against the dollar and other global currencies, although, it fell another 3 per cent against the euro.

Mr Hillier expects current uncertainty to ease as EU trade talks progress. “Sterling could be one of the strongest performers over the next 12 months, along with the Japanese yen,” he says.

Mr Purdy is also bullish on the pound, especially if domestic wage growth picks up and inflation falls, ending the current squeeze on consumers. “If this encourages the Bank of England to increase interest rates again, that should also help sterling,” he says.

Joel Kruger, market research analyst at LMAX Exchange, puts his neck on the line and predicts the pound will be the big winner in 2018. “Sterling is in a wonderful position to outperform as progress on Brexit is made, worst case scenarios are dismissed and the economic outlook improves,” he says.

However, sterling is walking a tightrope and if EU negotiations go badly it could plunge again. Morgan Stanley recently warned it could fall as much as 7 per cent against the euro this year.

Japanese yen

The yen had a tough 2017, falling 9 per cent against the euro and 5 per cent against sterling, while holding steady against the dollar.

However, Mr Hillier expects the currency to rise this year, citing the country's new-found economic vigour, improved growth and free trade agreement with the EU, finalised last month. "The Japanese economy expanded at an annualised rate of 2.5 per cent in the third quarter of 2017. This, together with expected global growth, should lead the yen into strong bullish territory."

Mr Purdy says the yen is currently undervalued and its fortunes could be about to change. "An upturn in the global economy should bring higher growth, spending and inflation across the globe, which might encourage the Bank of Japan to loosen its policies."

However, he warns the world’s third-biggest economy could be hit by political tensions between the US and North Korea, especially if Kim Jong-un continues to fire ballistic missiles over Japanese territory.

Chinese yuan

The yuan has performed poorly lately and Mr Purdy expects this to continue this year.

Chinese president Xi Jinping is forcing through market-oriented reforms of the country’s foreign exchange rate and financial system, in a bid to expand global adoption of its currency. “However, attempts to drag the renminbi out of the doldrums might be hit by US threats to impose protectionist trade measures on China,” says Mr Purdy.

Mr Hillier predicts the yuan will remain weak against the major currencies. "China will continue to ease foreign investment restrictions, which should offset its capital outflow pressures."


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Russian rouble

The rouble has been hit by low oil prices and could be further sunk by interest rates cuts in 2018.

Mr Hillier says President Putin's presence, "will continue to bring stability, but we expect current underperformance to continue in 2018.”

Emerging markets

Emerging market currencies did well in 2017, benefiting from the weak US dollar, Mr Hillier says. “They could struggle if the dollar picks up although expectations of global economic growth should improve their outlook.”

He is optimistic over prospects for the Indian rupee and South African Rand. “Both countries look set to lead the emerging market rebound,” he says.

Australian dollar

Mr Purdy reckons “the stars are about to align” for the Australian dollar in 2018. “Anticipated interest rate hikes by the Reserve Bank of Australia, global economic growth and improved conditions for commodities like iron ore may drive up the Aussie dollar," he says. "The danger is this may already be priced into the market.”


After an astonishing year in which it rose 1,800 per cent at one point, cryptocurrency bitcoin continued its crazy volatility over Christmas, when its price swung between $12,000 and $17,000.

Mr Kruger says investors should brace themselves for more to come. "There is no denying bitcoin's potential, as it could be a compelling alternative store of value to gold, while the underlying blockchain technology may drive the next wave of global technological innovation.”

However, he says bitcoin’s price has rocketed past the point of rational appreciation and too many questions remain unanswered. “Bitcoin has also benefited greatly from the ultra-accommodative global monetary policy. If interest rates rise in 2018 and we see a flight to safety, that could suck out the speculators, and drag bitcoin back down to earth.”

Fawad Razaqzada, market analyst at, says there is little doubt that bitcoin is a bubble, the only question is how far it can go before bursting. “In an uncertain world, the only certainty is that the massive volatility in bitcoin and other cryptos such as ethereum, litecoin and XRP by Ripple will continue in 2018.”

A word of warning

As with every currency, you must limit your exposure to the unpredictable shifts and swings, because even the experts cannot say with certainty what will happen next.

If you thought stock market performance was impossible to predict, second-guessing currency movements is even tougher.

No currency has its own intrinsic value, this can only be valued in relation to another currency, known as its pair.

So, for example, the US dollar can be priced against the European single currency, British pound, Japanese yen, Chinese renminbi, Indian rupee or Venezuelan bolívar, but never on its own.

It is therefore impossible for every global currency to rise – or fall – at exactly the same time. If one rises, another must fall, and vice versa.

David Hillier, a currency expert at global transfer service Moneycorp, says any exchange rate forecast involves not one but three predictions. “You must predict the future value of the two currencies individually and their relative strength to each other. If you call just one wrong, your forecast will be wide of the mark.”

Charles Purdy, chief executive of Smart Currency Exchange, says expats must limit their exposure to foreign exchange swings. “It can be highly costly and unnerving if currency volatility works against you, so you need to manage your risk.”

If sending regular payments overseas consider using a currency transfer service to lock into a favourable rate for one or two years, rather than leaving yourself at the mercy of market swings.

Dates for the diary

To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:

  • September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
  • October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
  • October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
  • November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
  • December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
  • February 2, 2018 Bodytree will host its 4th annual yoga market.

New Zealand 266 for 9 in 50 overs
Pakistan 219 all out in 47.2 overs 

New Zealand win by 47 runs

New Zealand lead three-match ODI series 1-0

Next match: Zayed Cricket Stadium, Abu Dhabi, Friday

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Inside Out 2

Director: Kelsey Mann

Starring: Amy Poehler, Maya Hawke, Ayo Edebiri

Rating: 4.5/5

UAE currency: the story behind the money in your pockets
Visit Abu Dhabi culinary team's top Emirati restaurants in Abu Dhabi

Yadoo’s House Restaurant+& Cafe

For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.

Golden Dallah

For the cappuccino, luqaimat and aseeda.

Al Mrzab Restaurant

For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.

Al Derwaza

For the fish hubul, regag bread, biryani and special seafood soup. 


July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

Salah in numbers

€39 million: Liverpool agreed a fee, including add-ons, in the region of 39m (nearly Dh176m) to sign Salah from Roma last year. The exchange rate at the time meant that cost the Reds £34.3m - a bargain given his performances since.

13: The 25-year-old player was not a complete stranger to the Premier League when he arrived at Liverpool this summer. However, during his previous stint at Chelsea, he made just 13 Premier League appearances, seven of which were off the bench, and scored only twice.

57: It was in the 57th minute of his Liverpool bow when Salah opened his account for the Reds in the 3-3 draw with Watford back in August. The Egyptian prodded the ball over the line from close range after latching onto Roberto Firmino's attempted lob.

7: Salah's best scoring streak of the season occurred between an FA Cup tie against West Brom on January 27 and a Premier League win over Newcastle on March 3. He scored for seven games running in all competitions and struck twice against Tottenham.

3: This season Salah became the first player in Premier League history to win the player of the month award three times during a term. He was voted as the division's best player in November, February and March.

40: Salah joined Roger Hunt and Ian Rush as the only players in Liverpool's history to have scored 40 times in a single season when he headed home against Bournemouth at Anfield earlier this month.

30: The goal against Bournemouth ensured the Egyptian achieved another milestone in becoming the first African player to score 30 times across one Premier League campaign.

8: As well as his fine form in England, Salah has also scored eight times in the tournament phase of this season's Champions League. Only Real Madrid's Cristiano Ronaldo, with 15 to his credit, has found the net more often in the group stages and knockout rounds of Europe's premier club competition.

The five pillars of Islam

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