{"id":29941,"date":"2025-07-01T13:29:13","date_gmt":"2025-07-01T13:29:13","guid":{"rendered":"https:\/\/www.europesays.com\/us\/29941\/"},"modified":"2025-07-01T13:29:13","modified_gmt":"2025-07-01T13:29:13","slug":"weaker-us-dollar-dents-purchasing-power-and-discretionary-spending-in-gulf","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/29941\/","title":{"rendered":"Weaker US dollar dents purchasing power and discretionary spending in Gulf"},"content":{"rendered":"

A weaker US dollar is weighing <\/b>on the purchasing power of people in the Gulf region, denting discretionary spending and reducing international remittances<\/a>, but is supporting regional tourism<\/a> inflows, according to industry experts.<\/p>\n

On Tuesday, the dollar index fell 0.2 per cent at 11.56am UAE time to a more than three-year low, hitting its lowest level against the euro since September 2021.<\/p>\n

The greenback, which is considered the world’s reserve currency, has weakened by more than 10 per cent in the first half of this year, dragged down by US fiscal and trade policy direction. <\/p>\n

\"\"<\/p>\n

The currencies of five countries in the six-member Gulf Co-operation Council are pegged to the greenback, with Kuwait’s dinar being the only exception, and movements in the US dollar<\/a> tend to have a direct impact on spending patterns in the region.<\/p>\n

\u201cA weaker US dollar carries significant implications for the Gulf region, where most currencies, such as the UAE dirham and Saudi riyal, are pegged to the US dollar,\u201d Vijay Valecha, chief investment officer at Century Financial, says.<\/p>\n

\u201cThis peg ensures currency stability, but it also means that movements in the USD directly influence the region\u2019s external financial behaviour, particularly remittances, spending, and global investment flows.\u201d<\/p>\n

Uncertainty over President Donald Trump\u2019s aggressive pursuit of hefty tariffs on global trading partners<\/a> and his constant pressure on the US Federal Reserve to slash rate cuts have prompted investors to shun American assets, including the dollar. The greenback’s first-half performance is the worst since 1973.<\/p>\n

Spending<\/b><\/p>\n

In the UAE and wider Gulf, a weaker greenback can influence both domestic and international spending behaviour, says Ben Bolger, a financial planner in Abu Dhabi and founder of Squirrel Education<\/a>, a company that teaches schoolchildren financial independence. <\/p>\n

\u201cFor residents earning in local currency, international expenses such as overseas travel, education, or luxury goods from countries with stronger currencies like the euro or pound, become more expensive, reducing a person\u2019s international purchasing power,\u201d Mr Bolger says. <\/p>\n

\u201cDomestically, the picture is slightly more nuanced. While the peg helps stabilise local pricing, many goods and services are ultimately tied to foreign supply chains, so a weaker dollar can lead to gradual price increases over time, contributing to inflation and influencing household budgets.\u201d<\/p>\n

With a weaker dollar, the cost of non-dollar imports, mostly from the EU, Japan and the UK, also rises, which in turn, fuels inflation, according to Nicolas Michelon, managing partner of Alagan Partners, a Dubai corporate geopolitics consultancy.<\/p>\n

This will be particularly strong for goods such as machinery, consumer electronics and pharmaceuticals, which the Gulf economies import from the EU, Japan and the UK, he says.<\/p>\n

\u201cAn increase in imported inflation will lead to a purchasing power erosion among consumers in the Gulf for all imported goods, particularly those that are priced in stronger currencies like the euro,\u201d he adds.<\/p>\n

Remittances<\/b><\/p>\n

Weakness in the US dollar<\/a> can also lead to a drop in remittances<\/a> by expatriates in the UAE and wider region, experts say.<\/p>\n

For remittances, a weaker dollar typically reduces the value of money sent home by expatriates, says Hamza Dweik, head of trading at Saxo Bank Mena. <\/p>\n

When converted into local currencies such as the Indian rupee or Philippine peso, the amount received is lower, which can diminish the purchasing power of families relying on these funds. This may lead to changes in remittance behaviour, with some expatriates choosing to delay transfers or reduce the amounts they send, he adds.<\/p>\n

Syed Muhammad Ali, chief executive of digital payroll platform myZoi, says there are varying behaviours by senders depending on their income levels and needs of beneficiaries. <\/p>\n

\u201cLower income families who often depend on these remittances as their only source of livelihood expect to receive the funds every month in a timely manner. The sender, therefore, would look for the best available exchange rates, sometimes opting for informal channels like hundi\/hawala if the rates offered are more attractive,\u201d he says. <\/p>\n

\u201cThose who have more flexibility can wait for the rates to improve and often send larger amounts when the USD [and Gulf] currencies strengthen to take advantage of the market.\u201d<\/p>\n

Mr Valecha of Century Financial says that in recent months, the currencies of several recipient countries have depreciated more sharply than the dirham. <\/p>\n

For instance, the Indian rupee weakened to Dh23.5 per in June 2025, prompting a noticeable increase in remittance activity from Indian expatriates. <\/p>\n

Looking ahead, if the dollar continues to soften while emerging market currencies remain under pressure, remittance behaviour could remain elevated, Mr Valecha adds.<\/p>\n

Investing<\/b><\/p>\n

From an investment perspective, a weaker dollar prompts a shift towards assets seen as a hedge against currency volatility, such as gold or foreign equities, or increase interest in local investments that are less exposed to exchange rate risk, Mr Bolger says.<\/p>\n

\u201cA weaker USD is beneficial for the UAE, as it makes investing into the Emirates cheaper from countries with stronger or appreciating home currencies, such as the euro, Japanese yen, Swiss franc and most emerging market currencies,\u201d says Anita Gupta, chief investment officer <\/b>at <\/b>DIFC-based wealth management firm Wealthbrix Capital Partners. <\/p>\n

\u201cThis would boost foreign direct investment and the real estate sector especially.\u201d <\/p>\n

Retail investors, however, have less disposable income, as savings are typically in UAE dirhams, hence a weaker currency would lead them to more domestic investment, she adds. <\/p>\n

Saxo Bank\u2019s Mr Dweik says a weaker dollar often prompts investors to reassess their portfolios and a shift away from dollar-denominated assets in favour of those in stronger currencies or more stable markets. <\/p>\n

\u201cGulf investors might also explore diversification strategies, seeking opportunities in the eurozone, Asia, or emerging markets,\u201d he adds. <\/p>\n

\u201cAt the same time, overseas investments, particularly in real estate or equities priced in stronger currencies, could become more expensive, potentially slowing outbound capital flows.\u201d<\/p>\n

Mr Valecha says a weaker dollar also makes emerging-market stocks and bonds more appealing because US investments will offer lower returns.<\/p>\n

A weaker dollar may prompt a shift toward assets seen as a hedge against currency volatility, such as gold or foreign equities<\/p>\n

Ben Bolger,
financial planner, Abu Dhabi<\/p>\n

Travel<\/b><\/p>\n

Continued weakness in the US dollar<\/a> also supports inbound travel to the UAE and other Gulf destinations from countries such as western Europe, Russia and India, industry executives say.<\/p>\n

\u201cTravellers from the eurozone, from pound-sterling areas, will find Gulf destinations cheaper because of a weak dollar,\u201d Mr Michelon of Alagan Partners says. <\/p>\n

\u201cThe impact on the outbound tourism could be very different, and we could see Gulf residents face much higher costs for European holidays due to the euro strength.<\/p>\n

\u201cThat could potentially massively redirect travel to more regional destinations, such as Egypt, Jordan, or Lebanon, which is reopening to tourism.\u201d<\/p>\n

The euro has risen almost 12 per cent this year, benefiting from a softer dollar. <\/p>\n

Many Gulf hotels price their services in US dollars, which usually makes them costlier for non-US tourists when the dollar strengthens. So, a weaker US dollar reverses that trend, Mr Michelon says. <\/p>\n

It could \u201creinforce the attractiveness\u201d for non-GCC tourists to come and visit the GCC because hotels will be priced more competitively for them, he adds.<\/p>\n

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Power:<\/strong> 153hp at 6,000rpm<\/p>\n

Torque:<\/strong> 200Nm at 4,000rpm<\/p>\n

Transmission:<\/strong> 6-speed auto<\/p>\n

Price:<\/strong> Dh99,000<\/p>\n

On sale:<\/strong> now<\/p>\n

Company%C2%A0profile<\/p>\n

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Company%20profile<\/p>\n

%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20FinFlx%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20January%202021%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Amr%20Yussif%20(co-founder%20and%20CEO)%2C%20Mattieu%20Capelle%20(co-founder%20and%20CTO)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%20in%3A%3C%2Fstrong%3E%20Dubai%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20FinTech%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunding%20size%3A%3C%2Fstrong%3E%20%241.5m%20pre-seed%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Venture%20capital%20-%20Y%20Combinator%2C%20500%20Global%2C%20Dubai%20Future%20District%20Fund%2C%20Fox%20Ventures%2C%20Vector%20Fintech.%20Also%20a%20number%20of%20angel%20investors%3C%2Fp%3E%0A<\/p>\n

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Saturday: Super Special Spectator Stage \u2013 Yas Marina Circuit \u2013 start 3.30pm.
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Thursday: Abu Dhabi Aviation Stage 5 (218.57km) Finish: Yas Marina Circuit \u2013 4.30pm.<\/p>\n

The specs: 2018 Opel Mokka X<\/p>\n

Price, as tested: Dh84,000<\/p>\n

Engine: 1.4L, four-cylinder turbo<\/p>\n

Transmission: Six-speed auto<\/p>\n

Power: 142hp at 4,900rpm<\/p>\n

Torque: 200Nm at 1,850rpm<\/p>\n

Fuel economy, combined: 6.5L \/ 100km<\/p>\n

The Energy Research Centre<\/p>\n

Founded 50 years ago as a nuclear research institute, scientists at the centre believed nuclear would be the \u201csolution for everything\u201d.
Although they still do, they discovered in 1955 that the Netherlands had a lot of natural gas. \u201cWe still had the idea that, by 2000, it would all be nuclear,\u201d said Harm Jeeninga, director of business and programme development at the centre.
“In the 1990s, we found out about global warming so we focused on energy savings and tackling the greenhouse gas effect.\u201d
The energy centre\u2019s research focuses on biomass, energy efficiency, the environment, wind and solar, as well as energy engineering and socio-economic research.<\/p>\n

RESULT<\/p>\n

Manchester City 5 Swansea City 0
Man City:<\/strong> D Silva (12′), Sterling (16′), De Bruyne (54′ ), B Silva (64′ minutes), Jesus (88′)<\/p>\n

Auron Mein Kahan Dum Tha<\/p>\n

Starring:<\/strong> Ajay Devgn, Tabu, Shantanu Maheshwari, Jimmy Shergill, Saiee Manjrekar<\/p>\n

Director:<\/strong> Neeraj Pandey<\/p>\n

Rating:<\/strong> 2.5\/5<\/p>\n

MATCH INFO<\/p>\n

Uefa Champions League semi-final:<\/strong><\/p>\n

First leg: <\/strong>Liverpool 5 Roma 2<\/p>\n

Second leg: <\/strong>Wednesday, May 2, Stadio Olimpico, Rome<\/p>\n

TV:<\/strong> BeIN Sports, 10.45pm (UAE)<\/p>\n

Gothia Cup 2025 <\/p>\n

4,872<\/strong> matches\u00a0<\/p>\n

1,942<\/strong> teams<\/p>\n

116<\/strong> pitches<\/p>\n

76<\/strong> nations<\/p>\n

26<\/strong> UAE teams<\/p>\n

15<\/strong> Lebanese teams<\/p>\n

2<\/strong> Kuwaiti teams<\/p>\n

MATCH INFO<\/p>\n

Norwich 0<\/strong><\/p>\n

Watford 2<\/strong> (Deulofeu 2′, Gray\u00a052′)<\/p>\n

Red card:<\/strong> Christian Kabasele (WatforD)<\/p>\n

MATCH INFO<\/p>\n

Mumbai Indians<\/strong> 186-6 (20 ovs)
Kings XI Punjab<\/strong> 183-5 (20 ovs)<\/p>\n

Mumbai Indians won by three runs<\/p>\n

Dark Souls: Remastered
Developer: From Software (remaster by QLOC)
Publisher: Namco Bandai
Price: Dh199<\/p>\n

Match info<\/p>\n

Premier League<\/strong><\/p>\n

Manchester United 2 (Martial 30′, Lingard 69′)
Arsenal 2 (Mustafi 26′, Rojo\u00a068′ OG)<\/p>\n

UAE currency: the story behind the money in your pocketsMilestones on the road to union<\/p>\n

1970<\/b><\/p>\n

October 26: Bahrain withdraws from a proposal to create a federation of nine with the\u00a0seven Trucial States and Qatar.\u00a0<\/p>\n

December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.<\/p>\n

1971<\/b><\/p>\n

March 1:\u00a0 Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and \u201cstrongly supports\u201d the creation of a Union of Arab Emirates.<\/p>\n

July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.<\/p>\n

July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.<\/p>\n

August 6:\u00a0 The fifth\u00a0anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.<\/p>\n

August 15: Bahrain becomes independent.<\/p>\n

September 3: Qatar becomes independent.<\/p>\n

November 23-25: Meeting with Sheikh Zayed and Sheikh\u00a0Rashid and senior British officials to fix December 2 as date of creation of the UAE.<\/p>\n

November 29:\u00a0 At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.<\/p>\n

November 30: Despite\u00a0 a power sharing agreement, Tehran takes full control of Abu Musa.\u00a0<\/p>\n

November 31:\u00a0UK officials visit all six participating Emirates to formally end the Trucial States treaties<\/p>\n

December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.<\/p>\n

December 6:\u00a0Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.<\/p>\n

December 9:\u00a0UAE joins the United Nations.<\/p>\n","protected":false},"excerpt":{"rendered":"A weaker US dollar is weighing on the purchasing power of people in the Gulf region, denting discretionary…\n","protected":false},"author":3,"featured_media":29942,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,25616,79,5770,4313,255,10235,645,67,132,68],"class_list":{"0":"post-29941","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-business-team","10":"tag-economy","11":"tag-gcc","12":"tag-investing","13":"tag-personal-finance","14":"tag-standard","15":"tag-story","16":"tag-united-states","17":"tag-unitedstates","18":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114778221031829030","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/29941","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=29941"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/29941\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/29942"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=29941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=29941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=29941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}