Lebanese Forex Market:
Demand for the Lebanese Pound in the Lebanese Forex market weakened versus the Dollar during the two-week period ending 2nd of October with the exchange rate moving within the peg range from $/LP 1,508–1,512 with a mid-price of $/LP 1,510 to $/LP 1,509–1,513 with a mid-price of $/LP 1,511. Foreign assets (excluding gold) at the Central Bank dropped by a monthly 0.89% to reach $38.25B at the end of September 2015. As for the dollarization rate of private sector deposits, it slid from 65.71% in December 2014 to 65.08% by June this year.
By Friday 2nd of October, 2015, 15:30 pm Beirut time, the dollar-pegged LP appreciated against the euro going from €/LP 1,725.94 two weeks earlier to €/LP 1,683.12, representing a 2.48% slip. The Nominal effective exchange Rate (NEER) increased by 0.80% to 167.40 points, narrowing its year-to-date gains to 13.63%.
International Forex Market:
For the past two weeks the Dollar, has been bullish at the expense of the Euro. In details, the Euro depreciated by 2.48% against the dollar to €/$ 1.1165. Many factors held back the European single currency in the past 2 weeks, of which the Federal Open Market Committee (FOMC) decision in the U.S. not to hike interest rates in September. However, this resolution was subsequently followed by the assurance of 3 Fed members that rates will be increased by the end of the year. Furthermore, latest U.S. economic data was promising while that released in Europe was weak. In detail, the latest U.S. growth figures (3.9% in H1) were higher than expected while updated German Retailers data in August 2015 slipped by 0.4% compared to July, illustrating that consumer sentiment might have waned.
Commodities:
Gold was bearish in the past two weeks mainly on the back of a strong Dollar, and poor performances in both U.S. and China’s equity markets. Hence, the price of gold declined by a weekly 2.35% to reach $1,109.96/once at 15:30 pm Beirut time.