A stronger Dollar Despite Mixed Expectations

Lebanese Forex Market

Demand for the dollar on the Lebanese forex market steadied over the past week, where the value of the Lebanese pound against the dollar maintained a mid-price of $/LP 1,514.25 within the range of $/LP 1,514 -1,514.50.

Foreign assets (excluding gold) at the Central Bank increased 9.46% since the beginning of the year to $40.60B by September 2016, boosted by the recent swap executed by BDL with the MoF and Lebanese banks. The dollarization ratio of private sector deposits fell from 64.88% in December 2015 to 64.76% in August 2016.

By Friday the 11th of November 2016, the euro depreciated against the dollar-pegged LP over the last week, going from €/LBP 1,673.33 to €/LBP 1,638.65. As for the Nominal Effective Exchange Rate (NEER) of the LBP, it rose by 0.56% to reach 267.72 points.

International Forex Market:

After the unexpected election of Donald Trump, the Euro spiked to €/$1.13; however, this rise was short-lived as investors’ expectations of a potential increase in interest rates became more tangible.  Hence, the euro depreciated against the dollar with the euro/dollar exchange rate falling to €/$1.087 this week, from €/$1.11, last week.

Commodities:

Over the past week, gold prices decreased from $1,301.56/ounce to $1,255.89/ounce this week.

11/11/2016 04/11/2016 %Change YTD
Euro / LBP            1,638.65 1673.330 -2.07%
Euro / Dollar 1.0870 1.1100 -2.07%
NEER Index** 267.72 266.22 0.56% 59.00%

 

 

 

 

 

 

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