Lebanese Forex Market
The Lebanese Pound (LP) continues to be steady within the official range of $/LP 1,514 – 1,514.5 against the dollar, with a mid-price of $/LP 1,514.25 by the week ending Jan. 24th 2020.
The peg also continues to be supported by the Central Bank’s solid foreign assets, which stood at $36.97B by mid-Jan 2020.
In turn, the dollarization ratio of private sector deposits increased from 70.62% in December 2018 to 74.69% in November 2019.
Over the week, the Euro depreciated against the dollar-pegged LP, with the currency pair going from €/LBP 1,672.23 last week to this week’s €/LBP 1,661.84. In turn, the Nominal Effective Exchange Rate (NEER) of the LP grew by a marginal 0.4% to stand at 118.2 points by the week ending Jan. 24th 2020.
International Forex Market
The Euro depreciated against the US Dollar this week, noting the currency pair went from last week’s €/USD 1.1093 to €/USD 1.1024 by Jan. 24th 2020. This can be partially attributed to the release of the “flash” IHS Markit Eurozone PMI which remained unchanged (compared to last month) at 50.9 in January 2020, therefore signaling a frail 0.1% GDP growth in the union. Moreover, the PMI revealed that the Euro zone business activity stalled at the start of the year while the European Central Bank (ECB) also left rates unchanged in its policy meeting this week. In its turn, the USD advanced this week amid fears of the Chinese outbreak of the coronavirus; however, its appreciation remained moderate as investors await the FOMC’s meeting scheduled for next week’s January 28th and 29th.
Commodities
In their turn, the international prices of gold marginally grew, going from last week’s $1,552/ounce to $1,561/ounce this week.