Here is why UAE residents preferring UK pound over US dollar

UAE expatriates are starting to move away from investments in US dollars (USD) as the American Presidential Election draws closer.

In the last week, Dubai-based Globaleye has seen investors increasingly look to put earnings into assets not related to US dollar.

That is expected to continue up to the election on Tuesday, and beyond it, as the full ramifications of the result on the global economy are felt.

In particular British pound (GBP) assets are being seen as particularly attractive by expatriates in the UAE, with the currency strengthening against the US dollar on Thursday and Friday.

Global Eye report many British expatriates believe that GBP has, for the near future, reached a low point and the time is right to invest before it starts to rally.

The strength of the US dollar is particularly important to those who earn in UAE dirhams (AED) as it is pegged to the US dollar.

“At the start of the year we saw a lot of expats in the UAE moving into cash investments on the back of market volatility in China,” said Globaleye Vice President, Stefan Terry.

“We are seeing that again now as politics always stirs up a lot of emotion. This US election is really affecting investments, probably more than any other election.

“Following Brexit we had a significant weakening of the British Pound which has continued until now. However, in relation to the USD that looks to have stopped for the time being. Expatriates feel now is the time to invest in GBP.”

This Tuesday the world will turn to American to watch the results of the US Presidential Election – between Hillary Clinton and Donald Trump – unfold.

In the UAE the personal finance ramifications are significant.

Stefan added: “On qualification criteria alone it’s hard to argue against Clinton’s candidacy, whereas Trump represents the greatest unknown.

“If Trump did win, the markets would likely go a little crazy in the short term. Once this volatility subsides, it wouldn’t be surprising to see stocks actually doing better than they would under a Clinton presidency given how difficult it would be for him to initiate any government action.

“In the UAE it is not just about who wins the election but also how that will affect individual’s investments and future plans.”

Dubai Gazette