If Trump and the Republicans can get their tax bill through Congress, the dollar may gain. Alejandro Ernesto/EPA
If Trump and the Republicans can get their tax bill through Congress, the dollar may gain. Alejandro Ernesto/EPA

Big month for the US dollar



With several key market events in the book, foreign exchange (FX) markets have stuck to the ranges shared during the last publication on 29 November.

The Dollar Index has spent December traded in our pre-prescribed range between 92.50 and as high as 94.20 levels while the euro fell against the greenback on the Dubai Gold & Commodities Exchange (DGCX) but held above our key support level at 1.17, which still represents a good level to initiate longs in the cross. It’s been a big month for the US dollar, which has seen some buying support as a result of optimism around the US president Donald Trump’s tax deal and if the Republicans can deliver in Congress this would see the greenback index moving higher and consolidated above 94 levels to close out the last month of 2018.

As expected, the last Fed meeting saw a third-rate hike delivered in 2017, to the channel between 1.25-1.5 per cent. It was a hawkish Fed with regard to future US fed rates that kept dollar bulls interested; in the accompanying statement, the Fed chairman Janet Yellen stated that the Fed would look to at least three additional rate hikes in 2018 with two more expected in 2019. Despite the dip in consumer prices in November (data showed that core inflation – less food and energy – dropped to 0.1 per cent month on month, while the year on year figure slowed to 1.7 per cent, down from a previous reading of 1.8 per cent) the Fed remains optimistic of future US growth prospects. With the rate hike largely priced in, again we maintain that developments from Washington will set the course for the US dollar through the end of December and through the first months of January.

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Read more:

A tricky time for the dollar but expect a December rate hike 

US tax and upbeat economic outlooks lift dollar’s fortunes

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With the holidays around the corner, liquidity will dry up in the currency markets, however, we do keep an eye on one key piece of US data to round of the calendar this month. Thursday’s US GDP reading, due out at 17:30 UAE time, is expected to show US growth coming in at 3.3 per cent and we don’t expect to see any surprises in this number.

Across the pond, we saw no new action from the Bank of England and the European Central Bank, both of which kept rates unchanged. If we start with the latter; the ECB president Mario Draghi kept the door open to future asset purchases from the ECB. After October’s meeting, in which the ECB reduced monthly asset purchases from €60 billion (Dh259.88bn) to €30bn a month, the recent stance of the ECB is perceived to be on the more dovish side. Despite good growth, inflation continues to lag in the euro zone and Mr Draghi remains non-committal on the course of future ECB policy, instead keeping all his options open. It was this stance that saw the euro weaken across the board, and hold above our key 1.17 level against the greenback. While the prospects for the EUR/USD cross look promising through the first half of 2018, we would need to see a good run of inflation data to keep this view alive through the first quarter of 2018. In the UK, we saw a different picture. With inflation at more than five year highs, the Bank of England MPC voted unanimously 9-0 to keep UK rates unchanged. The dovish undertones maintain that the bank remains susceptible to Brexit uncertainty, a theme which has been eroding sentiment in the British Pound. We had previously given a range of 1.33 and 1.3655 for the British pound against the dollar, and the cross is trading towards the lower end of this channel. We expect our earlier support level of 1.33 to continue to hold.

And finally, it has been an unforgettable month for the New Zealand dollar which was buoyed by optimism following the appointment of a new central bank head. The Kiwi was higher 2.75 per cent against the US dollar on the month on DGCX. We expect a retracement in the Kiwi against the greenback through the end of January, and watch for resistance to kick in at 0.71 levels in NZD/USD while a move back towards 0.6780 is more likely through the end of January.

Gaurav Kashyap is a market strategist at Equiti Global Markets

Mia Man’s tips for fermentation

- Start with a simple recipe such as yogurt or sauerkraut

- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.

- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.

- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.

 

Vidaamuyarchi

Director: Magizh Thirumeni

Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra

Rating: 4/5

 

Top New Zealand cop on policing the virtual world

New Zealand police began closer scrutiny of social media and online communities after the attacks on two mosques in March, the country's top officer said.

The killing of 51 people in Christchurch and wounding of more than 40 others shocked the world. Brenton Tarrant, a suspected white supremacist, was accused of the killings. His trial is ongoing and he denies the charges.

Mike Bush, commissioner of New Zealand Police, said officers looked closely at how they monitored social media in the wake of the tragedy to see if lessons could be learned.

“We decided that it was fit for purpose but we need to deepen it in terms of community relationships, extending them not only with the traditional community but the virtual one as well," he told The National.

"We want to get ahead of attacks like we suffered in New Zealand so we have to challenge ourselves to be better."

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Sreesanth's India bowling career

Tests 27, Wickets 87, Average 37.59, Best 5-40

ODIs 53, Wickets 75, Average 33.44, Best 6-55

T20Is 10, Wickets 7, Average 41.14, Best 2-12

COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
How The Debt Panel's advice helped readers in 2019

December 11: 'My husband died, so what happens to the Dh240,000 he owes in the UAE?'

JL, a housewife from India, wrote to us about her husband, who died earlier this month. He left behind an outstanding loan of Dh240,000 and she was hoping to pay it off with an insurance policy he had taken out. She also wanted to recover some of her husband’s end-of-service liabilities to help support her and her son.

“I have no words to thank you for helping me out,” she wrote to The Debt Panel after receiving the panellists' comments. “The advice has given me an idea of the present status of the loan and how to take it up further. I will draft a letter and send it to the email ID on the bank’s website along with the death certificate. I hope and pray to find a way out of this.”

November 26:  ‘I owe Dh100,000 because my employer has not paid me for a year’

SL, a financial services employee from India, left the UAE in June after quitting his job because his employer had not paid him since November 2018. He owes Dh103,800 on four debts and was told by the panellists he may be able to use the insolvency law to solve his issue. 

SL thanked the panellists for their efforts. "Indeed, I have some clarity on the consequence of the case and the next steps to take regarding my situation," he says. "Hopefully, I will be able to provide a positive testimony soon."

October 15: 'I lost my job and left the UAE owing Dh71,000. Can I return?'

MS, an energy sector employee from South Africa, left the UAE in August after losing his Dh12,000 job. He was struggling to meet the repayments while securing a new position in the UAE and feared he would be detained if he returned. He has now secured a new job and will return to the Emirates this month.

“The insolvency law is indeed a relief to hear,” he says. "I will not apply for insolvency at this stage. I have been able to pay something towards my loan and credit card. As it stands, I only have a one-month deficit, which I will be able to recover by the end of December." 

Five famous companies founded by teens

There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:

  1. Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate. 
  2. Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc. 
  3. Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway. 
  4. Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
  5. Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.
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Stormy seas

Weather warnings show that Storm Eunice is soon to make landfall. The videographer and I are scrambling to return to the other side of the Channel before it does. As we race to the port of Calais, I see miles of wire fencing topped with barbed wire all around it, a silent ‘Keep Out’ sign for those who, unlike us, aren’t lucky enough to have the right to move freely and safely across borders.

We set sail on a giant ferry whose length dwarfs the dinghies migrants use by nearly a 100 times. Despite the windy rain lashing at the portholes, we arrive safely in Dover; grateful but acutely aware of the miserable conditions the people we’ve left behind are in and of the privilege of choice. 

It’ll be summer in the city as car show tries to move with the times

If 2008 was the year that rocked Detroit, 2019 will be when Motor City gives its annual car extravaganza a revamp that aims to move with the times.

A major change is that this week's North American International Auto Show will be the last to be held in January, after which the event will switch to June.

The new date, organisers said, will allow exhibitors to move vehicles and activities outside the Cobo Center's halls and into other city venues, unencumbered by cold January weather, exemplified this week by snow and ice.

In a market in which trends can easily be outpaced beyond one event, the need to do so was probably exacerbated by the decision of Germany's big three carmakers – BMW, Mercedes-Benz and Audi – to skip the auto show this year.

The show has long allowed car enthusiasts to sit behind the wheel of the latest models at the start of the calendar year but a more fluid car market in an online world has made sales less seasonal.

Similarly, everyday technology seems to be catching up on those whose job it is to get behind microphones and try and tempt the visiting public into making a purchase.

Although sparkly announcers clasp iPads and outline the technical gadgetry hidden beneath bonnets, people's obsession with their own smartphones often appeared to offer a more tempting distraction.

“It's maddening,” said one such worker at Nissan's stand.

The absence of some pizzazz, as well as top marques, was also noted by patrons.

“It looks like there are a few less cars this year,” one annual attendee said of this year's exhibitors.

“I can't help but think it's easier to stay at home than to brave the snow and come here.”

COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million 
Pari

Produced by: Clean Slate Films (Anushka Sharma, Karnesh Sharma) & KriArj Entertainment

Director: Prosit Roy

Starring: Anushka Sharma, Parambrata Chattopadhyay, Ritabhari Chakraborty, Rajat Kapoor, Mansi Multani

Three stars