DUBAI 6 May 2018: Dubai has enhanced its reputation over the last decade as a center of excellence and innovation, particularly in the fields of futures and currency trading.
It has shown that financial innovation and leadership is strong and that Dubai is a top-class center to do business.
Dubai stands out as a credible trading time-zone between Asia and London and its financial markets are evolving in unison with the dynamic vision of the country’s leaders.
Dubai’s Gold and Commodities Exchange (DGCX) is well known to have been the first exchange to launch Indian rupee futures in 2007.
In early 2018, the UAE and India reached a historic agreement, which will enable businesses on both sides to bypass the US dollar or any other foreign currency and trade directly in UAE dirhams and the Indian rupee.
The above are some factors giving impetus to leading Dubai’s investing public to become more dynamic and interested in what makes markets move.
What to expect from global markets in 2018?
The FX market is about to come to the fore again as an alternative asset class as global interest rates rise. This spells a return to normality and potentially testing times for the many bubbles that have developed over a decade of quantitative easing and inexpensive borrowing.
There rests a great deal of uncertainty as to the future direction of equity markets.
Clearly we are seeing signs of a rapidly progressing large correction to the market. The consequences of uncertainty tend to lead investors to take risk off the table and seek ‘flights to quality’.
Currencies Benefit
In terms of currency trading, when markets become anxious, currencies such as the Swiss Franc, Yen and Euro tend to become the beneficiaries, so too XAU.
As interest rates rise, there are knock on effects to borrowers who have invested in property. Canada and New Zealand are good examples of countries with property bubbles. The Canadian property market will suffer greatly with incremental rises in interest rates, and far from supporting the currency, Canadian interest rates are a sign of weakness and the Canadian dollar will weaken.
As far as trading themes and trends this year, the market can expect a strengthening of the Euro, Swiss Franc, Yen and Gold.
Brexit, the UK’s exit from the European Union, will continue to hamper UK growth resulting in less exciting prospects for the British Pound.
Note: Ben Robson is trading risk strategist and author of bestseller “Currency Kings: How Billionaire Traders Made their Fortune Trading Forex and How You Can Too” presented in Dubai to a local audience of investors last month by invitation of Dubai headquartered Equiti Group.