Low Expectations for an Interest Rate Hike Drive up Demand for Gold

Lebanese Forex Market:

Activity on the Lebanese forex market decreased over the past week as the bid-ask spread of the Lebanese pound against the dollar broadened from$/LP 1,513.75 -1,514.25 with a mid-price of $/LP 1,514, to the same mid-price, within the range of $/LP 1,513.5 -1,514.5.

Foreign assets (excluding gold) of the Central Bank slightly slid by 0.91% since the beginning of the year to $36.75B by July 2016. The dollarization ratio of private sector deposits fell from 64.88% in December 2015 to 64.84% in June 2016.

By Friday 19th  of August, 2016, 1:00 pm Beirut time, the euro appreciated against the dollar-pegged LP as the exchange rate rose by 1.44%, over the last week, going from €/LP 1,681.31 to €/LP 1,705.59. As for the Nominal Effective Exchange Rate (NEER) it fell by 0.54% to reach 165.53 points.

International Forex Market:

The dollar was weak against the euro for the third week running as speculators’ expect that the Federal Reserves will not increase interest rates soon. The exchange rate rose by 1.44% over the past week to €/$ 1.1314.

Commodities:

Over the week, as a result of negative US data, foreigners rushed towards safe haven assets. Thus, gold saw its price increase from $1,337/ounce to $1,345.57/ounce this Friday.

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