Stock markets in the United Arab Emirates closed higher on Friday on rising oil prices and after the Federal Reserve indicated earlier in the week it is likely to cut borrowing costs next year.

Oil prices, a major driver for Gulf economies, were on track to notch up their first weekly rise in two months after a bullish forecast from the International Energy Agency (IEA) on oil demand for next year, with Brent futures rising 23 cents to $76.84 a barrel at 1123 GMT.

The U.S. Federal Reserve left interest rates unchanged on Wednesday and U.S. central bank chief Jerome Powell said the historic tightening of monetary policy is likely over as inflation falls faster than expected.

Monetary policy in the six-member Gulf Cooperation Council (GCC), including the United Arab Emirates, is usually guided by Fed policy decisions because most regional currencies are pegged to the U.S. dollar.

In Dubai, the main share index (.DFMGI) rose 0.5%, in its fourth positive session in a row, led by solid gains in financial stocks, with Emirates NBD Bank (ENBD.DU), Dubai’s largest lender inching up 1.5% and Dubai Investments (DINV.DU) climbing 3.6%.

The index notched up a 1.25% weekly gain after a third consecutive weekly loss.

Abu Dhabi’s index (.FTFADGI) added 0.2%, bolstered by a nearly 2% hike in Abu Dhabi Commercial Bank (ADCB.AD).

Read more: reuters.com

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