Lebanese Forex Market
The Lebanese Pound (LP) remained 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 June, 6 2020.
To-date, the peg continues to be supported by the Central Bank’s total foreign assets which settled at US$33.51B in May 2020.
In turn, the dollarization ratio for private sector deposits increased from 76.02% in December 2019 to 78.94% in April 2020.
In addition, the Euro depreciated against the dollar-pegged LP with the currency pair going from last week’s €/LBP 1,706.03 to €/LBP 1,702.87 by the week ending June, 12 2020. In turn, the Nominal Effective Exchange Rate (NEER) of the LBP rose by a weekly 0.05% over the week, to stand at 121.34 points.
International Forex Market
The Euro/USD went down from last week’s €/USD 1.1317 to €/USD 1.1296 by June 12, 2020. The euro pushed lower this week following the appreciation of the US dollar. In fact, the dollar considered as a safe haven gained this week as U.S. stocks tumbled amid diminished expectations that the global economy would recover swiftly from the coronavirus pandemic. Moreover, demand for safe-haven currencies increased after the Federal Reserve issued its outlook on Wednesday. The Fed signaled it plans years of extraordinary support for the U.S. economy, which policymaker’s project will shrink by 6.5% in 2020, with the unemployment rate at 9.3%
In turn, Gold considered also as a safe haven witnessed a weekly uptick of 0.97% to close the week at $1,735.61/ounce. As for Crude oil prices, it declined this week by 3.60% to close at $38.55/ barel. The losses came amid fears of a surge in new coronavirus infections in many U.S. states that could lead to a fragile recovery in demand at the world’s largest consumer.