Unchanged US Interest Rates Weakened the Dollar This Past Week

Lebanese Forex Market:

Demand for the Dollar in the Lebanese Forex Market slightly fell over the past week as the value of the dollar slid from $/LP 1,514-1,514.50 with a mid-price of $/LP 1,514.25 to $/LP 1,514-1,514.25 with a mid-price of $/LP 1,514.

Foreign assets (excluding gold) of the Central Bank inched up by 0.42% by the end of February, to $37.17B. The dollarization ratio of private sector deposits fell from 64.88% in December 2015 to 64.67% in January 2016.

By Friday 18th  of March, 2016, 12:30 am Beirut time, the euro appreciated against the dollar-pegged LP as the exchange rate increased 1.51%, over the last week, from €/LP 1,674.83 to €/LP 1,700.16. As for the Nominal effective Exchange Rate (NEER), it depreciated by a weekly 0.35% to 166.86 points, with a 0.91% year-to-date decrease.

International Forex Market:

The euro regained a bullish trend against the dollar after the Federal Reserve left rates unchanged at its last meeting and after it announced fewer rate hikes for 2016. The Fed claimed that although the US economy registered strong job gains and a pick-up in inflation during the past few months, it remains at risk from global economic and financial weaknesses.

Commodities:

Gold prices also followed a declining path this week as they dropped from last week’s $1,263.86/ounce to $1,250.76/ounce this week.

 

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