Interest Rates in the UAE Drop, Indicating Lower Loan Costs Ahead

The Fed’s move, based on stronger labor markets, economic growth, and lower inflation, has also impacted gold markets, with gold prices surging 1.7% as investors seek a safe-haven asset amid lower interest rates. Lower rates often weaken the dollar, increasing gold’s appeal as a hedge. Analysts predict that if gold breaks past $2,700, it could move to a target of $2,750.

Trump’s re-election could further boost regional economies in the Gulf, as his proposed tariffs might strengthen the dollar, supporting Gulf currencies like the UAE dirham. With Gulf nations, including the UAE and Saudi Arabia, focusing on non-oil sector growth — projected at 5.2% and 4.2% respectively for 2024 — analysts expect growth in diversified sectors, aided by foreign investment and a stronger dollar.

Financial markets have also responded to the Fed’s and Trump’s policy stances. Investors are extending “Trump trades,” pushing bond yields and the dollar higher while betting on sectors like banking and small/mid-cap stocks that may benefit from Trump’s industrial policies and deregulation efforts.

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