UAE Stocks Edge Up on Steady US Inflation Reading

UAE stocks experienced a minor uptick in response to a steady US inflation reading. The Personal Consumption Expenditures (PCE) inflation rate, the Federal Reserve's preferred measure, remained at 3.7% year-on-year in July.

The data showed that headline prices rose 0.2% month-over-month and core PCE increased by 0.2% on the month and 3.3% over the year. Berenberg, an investment bank, noted that the steady annual rate gives policymakers leeway to keep interest rates unchanged at 3.50%-3.75% in September.

The UAE dirham is pegged to the US dollar, so local interest rates tend to follow the Fed's lead. This means that the upcoming decision could have a significant impact on regional borrowing costs and valuations.