Dollar Improved the Most in Three Months during the Week ending October 3, 2014

Euro / LP1903.971921.76-0.93%
Euro / Dollar1.26301.2748-0.93%
NEER Index**138.88137.890.72%7.61%


Demand for the dollar steadied over the prior week as reflected by the Lebanese pound’s peg against the dollar that remained at $/LP 1,510-1,514 with a mid-price of $/LP 1,512, since last week. Foreign assets (excluding gold) at the Central Bank rose by a monthly 0.97% from $38.05B by August to $38.42B by end-September. Meanwhile, the dollarization rate of private sector deposits stood at 66.08% in July compared to 66.13% in December 2013.

The greenback strengthened as economists expect that a US government report would show that employment, in September, improved the most in three months. Thus, the euro lost 0.93% against the dollar, ending the week at €/$ 1.2630.

Even though the US broadened sanctions against Russia and stepped up its campaign against ISIS, the improving US economy and the rising interest rates degraded gold’s allure.  Thus its price dropped from last Thursday’s $1,222.44/ounce to $1,213.30/ounce this week.

By Friday October the 3rd, 2014, 12:30 pm Beirut time, the dollar-pegged LP appreciated against the euro going from €/LP 1,921.76 to €/LP 1,903.97. The Nominal effective exchange Rate (NEER) added 0.72% to 138.88 points, with a 7.61% gain since year-start.

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