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The strength of the US dollar on world markets looks likely to weaken further as a number of Middle Eastern states are expected to let their currencies rise in value against the dollar.
This now seems increasingly likely after Kuwait announced that it was raising the Kuwaiti dinar’s value against the dollar 1.7 percent.
This is the second time the Central Bank of Kuwait lifted the dinar’s exchange rate in the space of a month, following a 0.4 percent hike in June.
Added to this is the fact that Kuwait no longer rates its value solely against the dollar, but against a number of currencies, and there is increasing speculation that a number of other oil-rich countries in the Gulf may follow suit.
Oil rich nations such as Qatar are thought the most likely to consider revaluing their currencies.
Kuwait’s latest hike comes as the dollar continues to struggle, mainly due to the fallout of the subprime mortgage lending crisis and rising interest rates in the European Union.
For the US dollar, much will hinge on the release of the Federal Reserve’s latest report on Wednesday which should give some indication of the state of the housing market there.
01:52
Posted on Jul-30-2007
