USD & SAR - Markets & outlook
US dollar - USD:
The U.S. dollar (USD) is the world’s most traded currency and serves as the global reserve currency. Backed by the U.S. economy, it is a key benchmark for financial markets, commodities, and forex trading. Its value is influenced by monetary policy, economic data, global risk sentiment, and geopolitical events.
The Federal Reserve (Fed) determines the dollar’s strength through interest rate policies. Higher rates attract investors to the USD, causing it to appreciate. Lower rates or a dovish stance can weaken demand for the dollar. Inflation, employment data, and GDP growth are critical drivers of the dollar’s movement.
The USD is a safe-haven currency, strengthening during economic uncertainty, geopolitical tensions, or market volatility. Investors shift funds into U.S. Treasury bonds and USD assets during risks like recessions, banking crises, or global conflicts, boosting the dollar’s value.
As the dominant currency in global trade, the USD is used for most international transactions, including pricing key commodities like oil and gold. Rising oil prices increase global demand for the dollar. The dollar’s strength affects emerging markets with dollar-denominated debt, making loans more expensive to repay.
U.S. trade relations and fiscal policies also influence the dollar. Tariffs, trade deals, and government spending impact economic growth and investor confidence. A widening trade deficit can pressure the dollar, while strong demand for U.S. goods supports its value. The USD’s relationship with China is crucial in global forex markets.
Geopolitical events like the Ukraine war reinforce the USD’s safe-haven status, with capital inflows into the U.S. during uncertainty. Sanctions on Russia and shifting energy markets influence global demand for the dollar.
The dollar’s future depends on Federal Reserve policies, inflation trends, economic performance, and global market stability. While discussions around de-dollarization exist, the USD remains the backbone of the global economy, influencing financial markets worldwide.
Saudi riyal - SAR:
The riyal is officially pegged to the IMF's special drawing rights (SDRs). In practice, it is fixed at 1 U.S. dollar = 3.75 riyals, which translates to approximately 1 riyal = 0.266667 dollar.