EUR Down This Week As Coronavirus Cases Resurge

Euro / LP1,757.071,783.50-1.48%
Euro / Dollar1.16561.1831-1.48%
NEER Index129.63127.991.28%10.11%


Lebanese Forex Market

To-date, the Lebanese Pound (LP) remained steady within the official range of US $/LP 1,514 to 1,514.5, with a mid-price of $/LP 1,514.25 by the week of October 30th 2020.

This week’s Lebanese cabinet formation offered some positivity on the overall situation in the country. A cabinet of specialists when formed will assure the Lebanese policymakers’ abidance to the set of reforms needed prior to receiving external funding. Moreover, this step led to a drop in the USD exchange rate since Monday.

The peg to the US Dollar at the official rate continues to be supported by the Central Bank’s total foreign assets totaling $25.6B in Mid-October 2020. However, BDL intervenes by namely allowing small depositors to withdraw their dollar savings in LP at the rate of 3,900 while keeping the rate of conversion into US dollars at the “official rate”.

In turn, the dollarization ratio for private sector deposits increased from 76.02% in December 2019 to 80.18% in August 2020.

As for Euro/LP currency pair, the Euro depreciated against the dollar-pegged LP with the currency pair going from last week’s €/LBP 1,783.50 to €/LBP 1,757.07 by October 30th, 2020. Moreover, the Nominal Effective Exchange Rate (NEER) of the LBP recorded a weekly uptick of 1.28% to stand at 129.63 points over the same period.

International Forex Market

The Euro/USD went down from last week’s €/USD 1.1831 to €/USD 1.1656 by October 30th, 2020.

The Euro is trading lower against the US Dollar this week amid the imposed governmental measures to contain the rising coronavirus cases in France and due to the lack of progress in stimulus measures taken by the ECB which added pressure on the economic activity. Moreover, the US Dollar appreciated as next week’s US elections approach, adding that the U.S. economy grew at its fastest pace ever in the third quarter according to the Commerce Department, therefore expecting that the US Dollar will have a large ripple effect on other economies and currencies.

However, we can also note that The Conference Board reported on Tuesday, that its consumer confidence index declined to a reading of 100.9, from the 101.8 rise in September, as a new wave of coronavirus cases appeared across the country along with the rise in jobless claims and uncertainty over next week’s presidential election.


Gold prices went down this week by 1.94% to reach $1867.14/ounce. In fact, Gold prices dropped as uncertainty resides before the Nov. 3 elections, thus lifting the dollar’s demand as a safe asset over bullion, while coronavirus cases resurge in the U.S. and Europe.

Crude oil prices drastically fell this week by 11.33% to reach $42.46 per barrel since march as the resurgence of Covid-19 cases imposes restrictions and hinders the demand for auto and aviation fuel. Moreover, Prices have fallen this week with signs that both road use and airline capacity in Europe have diminished. However, traders are looking ahead to next week’s U.S. election and an OPEC+ meeting at the end of November.

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