Lebanese Forex Market
Demand for the dollar remained stable on the Lebanese Forex market with the value of the Lebanese Pound trading within the range of $/LP 1,514 – 1,514.5 with a mid-price of $/LP 1,514.25 since last week.
Foreign assets (excluding gold) at the Central Bank reached $39.26B in April 2017 compared to $40.71B in December 2016.
The dollarization ratio of private sector deposits rose from 65.82% in December 2016 to 66.13% by the end of March 2017.
By Friday May 12th, 2017, the euro depreciated against the dollar-pegged LP going from €/LBP 1,652.07 on May 5th to €/LBP 1,643.17, this week.
As for the Nominal Effective Exchange Rate (NEER) of the LBP, it increased by 0.23% over the past week to stand at 115.95 points.
International Forex Market:
The euro depreciated against the dollar this past week slipping by 0.54% to €/$ 1.09. The euro’s weakness came on the back of Macrons’election as French President on May 7th. However, the slump was not viewing Macron in a negative light, but investors rather reassessing their pre-election gains on the Euro and transitioning to new positions post-vote.
Moreover, in the US, the dollar strengthened on the back of comments released by Fed officials during the week on a higher likelihood to conduct two rate hikes this year.
Commodities:
Gold prices fell again this week from $1,233.60/ounce to $1,230.80/ounce, as Macron’s victory revived investors’ appetite for riskier assets and as expectations for tighter US monetary policy lifted bond yields.