A greater likelihood of a Federal Reserve interest rate hike this year took a US dollar index closer to an 11-year high on Thursday, with analysts suggesting a further strengthening in the months ahead.
The Dollar Index, which tracks the greenback against a basket of six major currencies, rose 0.2 per cent to 98.14. The index is up more than 8 per cent year-to-date and 23 per cent in the past 52 weeks. Against the euro, the dollar rose to $1.08.
But the response from regional stock markets was muted. The Dubai index dropped by 0.19 per cent for a second consecutive day of declines. The Abu Dhabi market fell 0.21 per cent, closing lower for the first time this week.
On Wednesday, the Federal Open Market Committee released minutes from its March 17 and March 18 meeting acknowledging slowing economic growth worldwide, but said it was still planning an interest rate hike this year, which could further strengthen the dollar.
Fed officials who pushed to lift benchmark rates in June were countered by others saying a stronger dollar would combine with declines in energy prices to curb inflation.
“It is important to watch the dollar index level, especially as it approaches the 101.70 mark, as it represents a cyclical resistance point, and in our estimation there is a low probability of it breaking above this level unless the Fed raises the rates,” said Nour Eldeen Al Hammoury, the chief market strategist at ADS Securities in Abu Dhabi.
“Going through this mark could signal the start of a further strengthening of the dollar,” said Mr Al Hammoury.
The UAE is poised to both benefit and suffer from a more expensive dollar.
“The dirham/dollar peg is opening up investment opportunities both in Europe and Asia, [but] the downside will be for UAE exports and the tourism sector,” Mr Al Hammoury said.
As the strengthening dollar makes American goods and services more expensive than elsewhere, it also reduces the value of US corporate profits from overseas operations. In 2012, the S&P 500 companies that provided details on foreign sales showed that almost 47 per cent of total sales came from abroad.
“The strong dollar may well impact a number of large US companies that compete in world markets,” said Pradeep Unni, the head of trading for commodities and currencies at Richcomm Global in Dubai. “Many Arab nationals have investments in US stock markets, and any such decline will only hurt their profit.”
ssahoo@thenational.ae
What are the main cyber security threats?
Cyber crime - This includes fraud, impersonation, scams and deepfake technology, tactics that are increasingly targeting infrastructure and exploiting human vulnerabilities.
Cyber terrorism - Social media platforms are used to spread radical ideologies, misinformation and disinformation, often with the aim of disrupting critical infrastructure such as power grids.
Cyber warfare - Shaped by geopolitical tension, hostile actors seek to infiltrate and compromise national infrastructure, using one country’s systems as a springboard to launch attacks on others.
Key products and UAE prices
iPhone XS
With a 5.8-inch screen, it will be an advance version of the iPhone X. It will be dual sim and comes with better battery life, a faster processor and better camera. A new gold colour will be available.
Price: Dh4,229
iPhone XS Max
It is expected to be a grander version of the iPhone X with a 6.5-inch screen; an inch bigger than the screen of the iPhone 8 Plus.
Price: Dh4,649
iPhone XR
A low-cost version of the iPhone X with a 6.1-inch screen, it is expected to attract mass attention. According to industry experts, it is likely to have aluminium edges instead of stainless steel.
Price: Dh3,179
Apple Watch Series 4
More comprehensive health device with edge-to-edge displays that are more than 30 per cent bigger than displays on current models.
Profile
Company name: Marefa Digital
Based: Dubai Multi Commodities Centre
Number of employees: seven
Sector: e-learning
Funding stage: Pre-seed funding of Dh1.5m in 2017 and an initial seed round of Dh2m in 2019
Investors: Friends and family
Indoor cricket in a nutshell
Indoor cricket in a nutshell
Indoor Cricket World Cup - Sept 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
Dubai World Cup factbox
Most wins by a trainer: Godolphin’s Saeed bin Suroor(9)
Most wins by a jockey: Jerry Bailey(4)
Most wins by an owner: Godolphin(9)
Most wins by a horse: Godolphin’s Thunder Snow(2)
THURSDAY FIXTURES
4.15pm: Italy v Spain (Group A)
5.30pm: Egypt v Mexico (Group B)
6.45pm: UAE v Japan (Group A)
8pm: Iran v Russia (Group B)
States of Passion by Nihad Sirees,
Pushkin Press
How much of your income do you need to save?
The more you save, the sooner you can retire. Tuan Phan, a board member of SimplyFI.com, says if you save just 5 per cent of your salary, you can expect to work for another 66 years before you are able to retire without too large a drop in income.
In other words, you will not save enough to retire comfortably. If you save 15 per cent, you can forward to another 43 working years. Up that to 40 per cent of your income, and your remaining working life drops to just 22 years. (see table)
Obviously, this is only a rough guide. How much you save will depend on variables, not least your salary and how much you already have in your pension pot. But it shows what you need to do to achieve financial independence.
