UAE expats shun dollar as US election looms

Huge opportunities for Banks within the SME sector

Expats in the UAE feel less confident investing in the US dollar due to the volatile economic conditions being caused by the United States’ presidential election, according to a report from Globaleye.

Over the past week or so, Globaleye said that it had seen investors look towards assets not related to the dollar. The wealth management firm said that this state of affairs is expected to continue up to the election on Tuesday, and possibly beyond, depending on who wins the presidential race between Hillary Clinton and Donald Trump.

“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.”

This Tuesday the world will turn to American to watch the results of what has been a bitter election campaign.

In the UAE the personal finance ramifications are significant, according to Terry.

“On qualification criteria alone it’s hard to argue against Clinton’s candidacy, whereas Trump represents the greatest unknown,” he said.

“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.”

However, up until that point, Terry said that expats in the UAE are too worried about the state of the US dollar to make significant investments in it. Indeed, he pointed out that even the British pound, which has been hugely volatile since the United Kingdom voted to leave the European Union, is currently a more attractive option for UAE expats.

Globaleye said that British pound assets are being seen as particularly attractive by expatriates in the UAE, with the currency strengthening against the USD on Thursday and Friday. Globaleye added that 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.

“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,” said Terry.

Want to ensure your money goes further no matter what currency you work in? Click the button below to compare the UAE’s best current and savings accounts to get started.

I want the best account!
Click to comment

You must be logged in to post a comment Login

Leave a Reply

To Top