Dubai TV Interview, Sept 20, 2021

Speaking to Dubai TV on Monday, Mohamed Hashad, Director of Research and Development at Noor Capital, discussed the current situation across global markets, with anticipation for a number of developments over the course of the week.

U.S. dollar

Hashad indicated that the US dollar benefited from positive US data, most notably: the inflation rate and retail sales. Retail sales jumped significantly above market expectations, to 0.7.

In turn, strong retail sales mean a stronger dollar and stronger consumer confidence and spending. Also, the increase in spending and the rise in retail sales is in the interest of the dollar and translates into an increase in the inflation rate, which will put pressure on the US Federal Reserve to taper sooner.

Oil

Hashad explained that oil has been on an upward trend during the past four weeks, as oil prices recorded 73 dollars and ten cents per barrel.

With regard to opening the new week’s trading on a decline, “Hashad” expects that this decline will be just a slight bearish correction, especially after the strong rise it witnessed in the past weeks, especially with the increase in the number of American drilling rigs, which will lead to retests 69 and 70 before rising it again.

Hashad indicated that the oil markets are awaiting the upcoming OPEC meeting in mid-October to offer some balance to markets.

Gold

Gold prices incurred significant losses as it lost more than $50, to $1,742 per ounce.

Gold was significantly affected by the rise of the dollar, which benefited from positive retail sales, which increases pressure on the Federal Reserve to reduce asset purchases, which means that it will buy assets with less debt and therefore fewer dollars in the market, which is in the interest of the dollar and its price increases.

Cryptocurrencies

There has been a lot of rumors recently about cryptocurrencies, among supporters and others, who warn of the dangers of investing in cryptocurrencies. These currencies have witnessed a collective decline in the recent period.

Hashad stated that criticism of Cryptocurrencies, led by Bitcoin, is one of the reasons that led to its decline. Christine Lagarde has criticized bitcoin as an unsafe currency to invest.

Likewise, a leading businessman in the United States said that these currencies should be used for payment not investment.

Hashad also explained that some US lawmakers are increasing the restrictions imposed on the cryptocurrency markets.

Thus, cryptocurrencies still need more legislation in the coming period to become an investment tool in the long and short term.

US Federal Reserve meeting

Hashad noted that Jerome Powell is now in trouble because economic data indicates that the high rate of inflation is sustainable despite his previous opinion that the current high inflation is just a transitional stage.

The data revealed a strong rise in the inflation rate, which necessitates that Powell at the next meeting will announce the schedule to taper, not to keep it hanging as he did at the Jackson Hole.