Are dollar investments bad now?

dubai — As the dollar hit lows against the safe-haven Swiss franc and other major currencies on nervousness ahead of tomorrow’s US presidential election, investors across the globe, including several UAE expatriates, are moving away from investments in the greenback.

Rattled by signs that the election race was tightening, investors in dollar-denominated assets anticipate that a victory for the Republican presidential candidate could trigger market convulsions and inflict long-term damage on the world’s biggest economy.

According to the Dubai-based Globaleye, a financial planning company, over the past week investors had increasingly been looking to put earnings into assets not related to dollar.

This trend 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, the financial consultancy said.

British pound assets are seen as particularly attractive to expatriate investors in the UAE, with the currency strengthening against the dollar on Thursday and Friday.

Many British expatriates believe that the pound has, for the near future, reached a low point

The strength of the dollar is particularly important to those who earn in dirham as it is pegged to the US currency

Globaleye report

and the time is right to invest before it starts to rally, Globaleye said. “The strength of the dollar is particularly important to those who earn in dirham as it is pegged to the US currency,” it said.

“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. 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,” said Stefan Terry, Globaleye vice-president.

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

Terry said personal finance ramifications of the US polls are significant in the UAE. “On qualification criteria alone it’s hard to argue against Hillary Clinton’s candidacy, whereas Trump rep- resents 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. > TURN TO PAGE 29