Dollar Hits Lowest since end-July

Dollar Hits Lowest since end-July
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Dollar Hits Lowest since end-July

Dollar Hits Lowest since end-July

The dollar hit a five-week low on Monday as investors looked ahead to a raft of US labor market data this week that could affect expectations for the Federal Reserve's easing path.

Traders were also assessing Friday's US inflation figures and a court ruling that most of Donald Trump's tariffs are illegal, as well as the US president's continuing tussle with the Fed over his attempt to fire Governor Lisa Cook.

Money markets have recently priced an around 90% chance of a 25 basis-point Fed rate cut in September and around 100 bps of easing by autumn 2026, according to the CME FedWatch tool.

Against a basket of currencies, the dollar eased 0.15% to 97.71, after hitting 97.534, its lowest level since July 28. It clocked a monthly decline of 2.2% on Friday.

Investors will be focussed on Friday's US nonfarm payrolls report, which will be preceded by data on job openings and private payrolls.

Analysts said the US economy is no longer outperforming as it did for much of the past decade, justifying a weaker dollar, and further signs of a softening labour market are expected to bolster that narrative.

"Severe weakness (in economic data) would point to an even more forceful Fed response than market pricing predicts," Societe Generale economist Klaus Baader said.

"But if May/June weakness is revealed as a statistical mirage, rate cuts would seem unwarranted given the almost certain prospect of rising inflation over the next year or so."

Some analysts still see the chance of a 50 basis-point move by the Fed later this month.

The euro was up 0.22% at $1.1707, while sterling rose 0.25% to $1.3537. US markets were closed for the Labor Day holiday on Monday.

Political risks are in focus as the French government faces likely defeat in a confidence vote next week over its plans for sweeping budget cuts.

Analysts noted that such risks tend to weigh on the currency only when there are clear signs of contagion within the euro area, something that is not evident at the moment.

US TRADE POLICY

Investors are keeping a close eye on trade policy while the US continues negotiations with key trading partners.

"We do not see much market impact from the court ruling," Jefferies economist Mohit Kumar said.

"The matter would pass on to the Supreme Court, which is likely to rule in favour of Trump."

The greenback has also been weighed down by worries over Fed independence, as Trump seeks more influence over monetary policy.

"Fiscal dominance risks should be more clearly apparent in both higher long-end US inflation break-evens and a higher risk discount on the dollar, none of which is materializing yet," George Saravelos, global head of forex research at Deutsche Bank, said.

"Fiscal dominance" refers to a scenario where central banks are pressured to ease monetary policy to help finance large budget deficits.

The dollar was up 0.14% at 147.26 against the yen after a monthly decline of 2.5% in August.

The onshore yuan rose 0.1% to 7.1374, snapping a six-day falling streak. It dropped to 7.1260 on Friday, its lowest level since Trump's presidential election win in early November 2024.

"By setting the daily fixes lower, the PBoC has signalled that policymakers in China are more comfortable to allow the renminbi to strengthen in the near term against the US dollar," said Lee Hardman, senior currency analyst at MUFG.

Such a move "could be a reflection that Chinese policymakers are less concerned over downside risks to growth in the near term", he added.



From Davos: The World Looks to Saudi Vision, from Reform to Delivery

The logo of the World Economic Forum at the Davos Conference Center (AFP)
The logo of the World Economic Forum at the Davos Conference Center (AFP)
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From Davos: The World Looks to Saudi Vision, from Reform to Delivery

The logo of the World Economic Forum at the Davos Conference Center (AFP)
The logo of the World Economic Forum at the Davos Conference Center (AFP)

At the 2026 World Economic Forum in Davos, Saudi Arabia offered a compelling account of how long-term ambition can be translated into measurable results.

Through a narrative grounded in data and outcomes, Saudi ministers traced the evolution of Vision 2030 from structural reform to disciplined execution, presenting the Kingdom as one of the world’s most attractive investment destinations.

Rising capital-formation rates now place Saudi Arabia alongside major economies such as China and India, underscoring growing international confidence in the strength and future of its economy.

On the margins of the forum, a high-level dialogue at the Saudi House pavilion brought together Princess Reema bint Bandar Al Saud, Saudi ambassador to the United States; Minister of Investment Khalid Al-Falih; Minister of Finance Mohammed Al-Jadaan; Minister of Economy and Planning Faisal Alibrahim; IMF Managing Director Kristalina Georgieva; and Lubna Olayan, Chair of Olayan Financing.

Titled From Reform to Delivery: Implementing Change at Scale, the session examined the next phase of Vision 2030 and how it has enhanced the government’s capacity for evidence-based planning and execution.

Saudi Arabia’s presence at the 2026 forum runs from Jan. 19-23 through an expanded Saudi House program - the largest since its launch - bringing together ministers, senior officials, business leaders and global thinkers.

From vision to policy discipline

Al-Jadaan emphasized that visions and reform agendas cannot be taken for granted. The true test, he said, lies not in designing strategies but in sustaining their execution, an area where many reform efforts around the world lose momentum. Saudi Arabia’s fiscal framework, supported by record foreign reserves at the central bank, has provided the flexibility needed to absorb shocks and maintain reform momentum.

He noted that 93 percent of Vision 2030’s key performance indicators have either been achieved or are progressing as planned. He added that reform has moved beyond individual initiatives to become a permanent institutional practice, supported by a 22 percent rise in financial reserves between 2022 and 2025.

He also stressed that trust and credibility are central to this process. Sustained progress depends on maintaining confidence with markets and stakeholders through pragmatic fiscal discipline and clear prioritization of resources. With fiscal space always finite, sequencing and focus are essential. He pointed to IMF Article IV consultations as a rigorous external validation of Saudi Arabia’s economic direction, noting that ambitions set a decade ago are now reflected in tangible outcomes, with hundreds of indicators either exceeding targets or firmly on track.

Converting strategy into outcomes

Building on this theme, Alibrahim said that turning strategies into results requires clarity of purpose, institutional adaptability and the ability to adjust course quickly. He explained that sustainable transformation cannot be achieved without a conscious approach to managing risk.

According to Alibrahim, Vision 2030’s long-term perspective has strengthened the government’s ability to plan, execute and respond to data, allowing it to change direction when needed while balancing risks and opportunities over both short and long horizons.

Attracting global capital

Al-Falih placed Saudi Arabia’s experience within a broader global context marked by geopolitical uncertainty, strained supply chains and rapid technological change. He noted that capital cannot avoid risk entirely but must find ways to balance it with the need for growth, particularly at a time when the world requires vast investment to navigate major transitions. These include energy digitization and the restructuring of global artificial intelligence supply chains.

He further explained that investors are increasingly drawn to markets that combine scale with access to global opportunities. This, in turn, requires skilled human capital, reliable energy, credible decarbonization pathways, advanced physical and digital infrastructure, and transparent, predictable regulatory systems. He said that few countries offer all these elements together, adding that Saudi Arabia has succeeded in doing so.

Al-Falih continued that foreign direct investment has risen to five times its pre–Vision 2030 level, while domestic investors have also increased their commitments. Capital formation as a share of GDP now matches levels seen in China and India, with visible effects across global supply chains, from shipbuilding on the eastern coast to automotive manufacturing on the western coast, as well as green and blue hydrogen projects developed with international partners.

Energy, markets and new frontiers

Al-Falih noted that the availability of Saudi capital, combined with a partnership-driven approach, has been a decisive factor. The government co-invests alongside the Public Investment Fund, major national companies and the private sector, aligning capital with strategic priorities.

While petrochemicals, fertilizers and mining remain important, the scope of transformation has broadened significantly. Saudi capital markets have become more integrated, the exchange-traded fund ecosystem has expanded, and inclusion in major global indices has lowered barriers for international investors.

At the same time, he said that the Kingdom is moving beyond its traditional role as an oil and gas supplier. It is investing in hydrogen, accelerating renewable energy localization and developing cross-border electricity interconnections with Africa, the Gulf, Iraq and Egypt. Investments in critical minerals and global supply chains now extend to joint ventures in the United States and Asia, supporting demand in a low-carbon economy. Saudi Arabia, Al-Falih concluded, also aims to position itself as a hub for the new economy, including data and artificial intelligence.

Georgieva: A transformation that inspires

Georgieva described Saudi Arabia’s reform journey as a “generational transformation” that spans sectors and places the Kingdom in a position of global leadership. Reforms that reduced the state’s direct role while enabling the private sector to flourish, she said, now underpin the country’s economic resilience.

She highlighted the breadth of diversification — from finance and tourism to sports and fashion — as particularly striking, adding that Saudi Arabia has also emerged as a partner and sponsor of reform beyond its borders, with the IMF office in Riyadh helping to share the Saudi experience with other countries. Concluding her remarks, she urged Saudi leaders and officials to maintain momentum and continue supporting others on similar paths.

Princess Reema, for her part, emphasized that human capital remains the engine of long-term growth. She said that investment in youth, job creation and a supportive social environment, encouraged many young Saudis to build their futures at home.

Lubna Olayan observed that the business landscape has undergone a notable shift. Where large corporations once dominated, small and medium-sized enterprises are now playing a growing role, supported by banks and new financing channels. She noted that economic diversification has opened private-sector opportunities, particularly in tourism, a labor-intensive service industry.

Powell: A model with global relevance

In a separate Saudi House session, Dina Powell McCormick, Vice Chair of Meta’s board, said her 25-year relationship with Saudi Arabia has given her a firsthand view of “extraordinary progress” under Vision 2030.

Recalling discussions in Washington in 2017 during her tenure as US deputy national security advisor under President Donald Trump, she described a long-term roadmap centered on unlocking the potential of a population that is more than 65 percent under the age of 35 and on the expanding role of women as entrepreneurs and leaders.

On technology, Powell said the world is approaching a pivotal moment that could reshape humanity within just three to eight years, making Saudi Arabia’s execution-focused transformation a model of growing relevance well beyond the region.


Nasser from Davos: AI Has Generated $6 Billion for Aramco

The CEO of Saudi Aramco, Engineer Amin Nasser (World Economic Forum)
The CEO of Saudi Aramco, Engineer Amin Nasser (World Economic Forum)
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Nasser from Davos: AI Has Generated $6 Billion for Aramco

The CEO of Saudi Aramco, Engineer Amin Nasser (World Economic Forum)
The CEO of Saudi Aramco, Engineer Amin Nasser (World Economic Forum)

The CEO of Saudi Aramco, Engineer Amin Nasser, on Tuesday revealed fundamental transformations in the company's financial and operational performance thanks to the adoption of artificial intelligence technologies.

He announced that the value achieved from the technology jumped to reach $6 billion during 2023 and 2024. It did not exceed $300 million in previous years.

Nasser explained, during a dialogue session at the Annual Meeting of the World Economic Forum 2026, in the Swiss city of Davos, that artificial intelligence alone was responsible for 50 percent of this value.

He pointed out that the company is looking forward to publishing the figures for 2025 next month, amid expectations of achieving savings and added value ranging between 3 and 5 billion additional dollars.

In his review of the direct impact on operations, Nasser confirmed that the use of artificial intelligence in the exploration and production sector has achieved amazing results.

Nasser directed a message to the global industry, saying: "The matter is not just about buying chips and graphics processing units, but about the quality of the data and creating talent". He noted that Aramco now has 6,000 talents trained in artificial intelligence.

He also revealed the enormous construction size of the company, saying; "Today we have projects worth $100 billion under construction". He explained that integrating artificial intelligence into these giant projects creates added value.

Nasser confirmed that the ambition is directed towards "autonomous operations" in cooperation with major cloud providers, while strictly maintaining safety and control standards.


Qatar Central Bank Says AI Operational Risks Need Prudential Focus

A boat makes its way past the Doha skyline in Doha, Qatar on Sunday, Jan. 18, 2026. (Sean Kilpatrick/The Canadian Press via AP)
A boat makes its way past the Doha skyline in Doha, Qatar on Sunday, Jan. 18, 2026. (Sean Kilpatrick/The Canadian Press via AP)
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Qatar Central Bank Says AI Operational Risks Need Prudential Focus

A boat makes its way past the Doha skyline in Doha, Qatar on Sunday, Jan. 18, 2026. (Sean Kilpatrick/The Canadian Press via AP)
A boat makes its way past the Doha skyline in Doha, Qatar on Sunday, Jan. 18, 2026. (Sean Kilpatrick/The Canadian Press via AP)

The governor of Qatar's central bank said on Tuesday that operational risks emerging from technologies like Artificial Intelligence should ‌be treated as ‌a ‌prudential ⁠risk and ‌as important as capital and liquidity-related regulation.

"I do believe that operation resilience should ⁠be also treated as ‌core prudential risk ‍and ‍should it ‍should not be treated as less important than capital and liquidity," Sheikh Bandar Bin Mohammed Bin ⁠Saoud Al-Thani, Governor of the Qatar Central Bank, told an event at the World Economic Forum in Davos.