Lebanese Forex Market
The Lebanese Pound (LP) steadied during the past week within the range of $/LP 1,514 – 1,514.5 against the dollar, with a mid-price of $/LP 1,514.25.
The peg continues to be supported by the Central Bank’s solid foreign assets, which stood at $37.08B by end-July 2019.
The dollarization ratio of private sector deposits increased slightly from 70.62% in Dec. 2018 to 71.49% in June 2019. As for the average interbank rate it stood at 8.8% in the week ending August 09 compared to 5.16% the previous week.
The Euro appreciated against the dollar-pegged LP, ending the week at €/LBP 1,686.31, compared to last week’s €/LBP 1,664.81. As for the Nominal Effective Exchange Rate (NEER) of the LBP, it decreased by a weekly 0.19% to stand at 118.93 points.
International Forex Market
The Euro/USD currency pair went from last week’s €/USD 1.1044 to €/USD 1.1186 in the week ending Aug. 09. The euro continued to strengthen against the dollar. In fact, the USD weaken this week following the renewal of trade tensions with China and the recent interest rate cut. In details, PBC( People’s Bank of China) allowed the yuan’s value to decrease with regards to that of the dollar past 7 yuan a dollar for the first time since the early, a move perceived as an extension of the current trade war between China and the United States into the field of monetary policy.
Accordingly, gold prices witnessed a significant increase from $1,437.64/ounce last week to $1,501.1/ounce in the week ending Aug. 09, 2019. Gold’s appeal as a safe haven asset increases in times of escalating trade tensions between the US and China and the Fed rate cut.