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 Feb. 07th 2020.
The peg also continues to be supported by the Central Bank’s solid foreign assets, which settled at $36.66B by January 2020.
In turn, the dollarization ratio of private sector deposits surged to 76.02% in December 2019, up from last year’s 70.62% during the same period.
Across the week, the Euro depreciated vis-à-vis the dollar-pegged LP as the currency pair went from last week’s €/LBP 1,662.37 to this week’s €/LBP 1,651.23. In turn, the Nominal Effective Exchange Rate (NEER) of the LP grew by a marginal 0.37% to stand at 119.1 points by the week ending Feb.07th 2020.
International Forex Market
A stronger US dollar this week pushed the currency pair of the EUR/USD further to the downside, going from last week’s €/USD 1.1027 compared to this week’s €/USD 1.0953
In fact, the dollar rose in the market on the back of optimistic US economic data published this week. In details, private payrolls, as measured by payroll processor ADP, rose 291,000 in January compared to December’s 199,000 and exceeding market expectations of around 157,000. Moreover, the dollar further gained traction with the Institute for Supply Management’s (ISM’s) Non-manufacturing index climbed to 55.5 in January, up from December’s 54.9 and thereby indicating an expansion in the U.S. services sector activity.
Meanwhile, the Euro declined on growing fears of a possible manufacturing slowdown in Europe, as industrial production in Germany which measures the outputs of the German factories and mines, dropped by -3.5% month-on-month as per official in figures compared to a market forecast of 0.2%.
The two-week uptrend witnessed in the international prices of gold was halted this week as the price of gold fell from last week’s $1,574/ounce to $1,566.6/ounce this week.