Euro Up this Week Amid Dollar Depreciation

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 March. 06, 2020.

The peg also continues to be supported by the Central Bank’s solid foreign assets, which settled at $35.7B by February 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 appreciated vis-à-vis the dollar-pegged LP as the currency pair went from last week’s €/LBP 1,654.24 to this week’s €/LBP 1,705.58. In turn, the Nominal Effective Exchange Rate (NEER) of the LP retreated by a marginal 1.29% to stand at 118.09 points by the week ending March 06, 2020.

International Forex Market

The Euro/USD currency pair went from last week’s €/USD 1.0973 to €/USD 1.1314 by March 06, 2020. In fact, the Euro strengthened on the back of USD currency significant drop. In details, U.S. government bond yields sent the dollar on course for its worst week since 2016. The Federal Reserve cut interest rates Tuesday in a rare emergency move, responding aggressively to the growing threat the coronavirus poses to the economy and financial markets. The Fed lowered its key federal fund rates by half a percentage point to a range of 1% to 1.25%. It marked the Fed’s first rate cut between scheduled meetings since the depths of the financial crisis in 2008.

Commodities

Gold jumped to high records as investors tried to assess an expanding global health crisis.  The commodity is headed for the biggest weekly gain since 2009, driven by a collapse in bond yields and concerns about the scale of the coronavirus outbreak. In details, international prices of gold advanced going from last week’s $1,641.95/ounce to this week’s $1,670.31/ounce.

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