Why UAE's Indian expats need to send money now before dollar falls - again

Dubai: Get salary, send the monthly funds right away.

Indian expats in the UAE did not waste any time in remitting over the last 48 hours and make use of the 23.6-Dh23.8 exchange rates against the dirham.

Because, if they delay, there’s more than a good chance that the rupee will start the new week stronger and return to 23.3-23.4 levels. “The chances are extremely high for the rupee to ease back from the current 23.76 levels because the dollar looks like weakening again,” said a money exchange house manager.  

“Since Friday, some of the highest Dirham-Indian Rupee remittance volumes have been recorded. Looking at trends, it doesn’t make sense for an Indian expat to be holding on to see what happens in the new week.”

On Thursday last, the rupee had fell to 23.87 against the dirham after US President trump announced India would be hit with 25% tariffs if no trade deal gets done.  

Late on Friday, the dollar lost quite a bit of the gains it had been making in the last 10 days, after the latest US economy data showed a significant drop in new jobs. Plus, there was a return of increased concerns over where exactly the US stands on tariffs on countries that had not yet secured a deal. For instance, imports from India were slapped with 25% tariffs and those on Canada were set at 35%.

The Indian rupee promptly dropped when markets opened last Thursday.

But a lot changed on Friday. "It's the dollar that's feeling the pressure after the poor US jobs report," said an FX analyst.

It's showing on the Dollar Index, which had recovered to 100 in recent days and on Friday took the sudden dive to 98 levels. In recent weeks, the lowest point has been 96 for the Dollar Index, which tracks the US currency's strength and weakness against other major ones. A score of 100 and over shows dollar's relative strength.

"Starting August 4, the coming days could be extremely volatile for the dollar and other currencies," said the FX analyst. "Clearly, worries about the US/global economy and what the tariffs are going to do is not receding."