Dollar Rallies Amid Fed’s Rate Hike; Pound Drop

Euro / LBP1,471.781,497.87-1.74%-13.86%
Euro / Dollar0.97630.9936-1.74%-13.86%
NEER Index175.16173.650.87%16.87%

Lebanese Forex Market

To-date, the Lebanese Pound (LBP) remained steady within the official range of USD/LBP 1,514 to 1,514.5, with a mid- price of USD/LBP 1,514.25 by November 04, 2022.

Meanwhile, on the parallel market this week, the Lebanese national currency has fluctuated around LBP/USD 37,300 with a minimum of LBP/USD 36,300 and a maximum of LBP/USD 38,000. The Lebanese currency depreciated this week after recording a remarkable improvement the last week driven by the announcement of the Central Bank regarding stopping its purchase of dollars from the parallel market. Hence, Lebanon entered a legal and political vacuum without a functioning Cabinet as the President Michel Aoun has left the presidential palace with no elected successor. Not to mention that plan to re-peg the official rate to 15,000 LBP per USD instead of 1,500 LBP per USD seems not finding a way among political class as political disagreements stopped the move, perhaps, no one in the country is ready to bear any responsibility for any reform action. As such, it will most likely be shelved to a future IMF deal.

As for the Euro/LBP currency pair, the Euro depreciated against the dollar-pegged LBP with the currency pair going from last week €/LBP 1,497.87 by October 28, 2022 to €/LBP 1,471.78 by November 04, 2022. Moreover, the Nominal Effective Exchange Rate (NEER) of the Lebanese pound increased marginally by 0.087% weekly to stand at 175.16 points on November 04, 2022.

International Forex Market

The US dollar strengthen against its major competitors early Friday; in more details, the dollar index increased against the six major currencies, and traded 1.50% higher at 112.54 up from last week 110.88.

The Euro slid below 0.9800 and closing the week at $0.9763 as the latest US jobs report showed further stronger labor market, thus keeping the green currency solid. The Euro currency would follow a downtrend in the coming period and an improvement would be noticeable once the Labor market in the US weakens, consequently affecting the strong dollars.

Meanwhile, the GBP/USD price plunged significantly after a mix trade on Friday and stood at 1.1175 on November 04, 2022 as the markets reacted to Bank of England action to tapper hot inflation by pushing through its biggest interest rate hike in 33 years on Thursday.

As for the Swiss Franc, it depreciated to 1.0083 this week, against 0.9946 Swiss/ Dollar the previous week despite Swiss inflation slowed for the second month. In details, Swiss CPI rose 3% annually but remained lower than the 3.2% median forecast of economists surveyed by Bloomberg.

Beyond Europe, the Japanese currency depreciated by 0.13% this week, reaching JPY/US 147.82. However, the divergence between Fed and Bank of Japan would continue to limit any meaningful corrective slide, indicating that USD/JPY pair trend would remain to the upside.

This week, the Chinese and Australian currencies appreciated respectively against the dollar by 0.02% and 0.92% reaching CNY/USD 7.2551 and AUD/ USD 0.6355. On the other hand, the Canadian currency depreciated against the dollar by 0.21% reaching CAD/USD 1.3640.


Gold prices dropped by 0.15% on a weekly basis to $1,646.8/ounce, versus 1649.3/ ounce in the previous week. As usual, the gold moved contrary to the strong dollars by the end of this week affirming its inverse relation to the green currency.

Crude oil prices increased significantly by 3.07% this week to $90.79/barrel compared to $88.09/ barrel in the previous week. In fact, crude oil traded higher on Friday  as the market reacted to China’ s news regarding easing COVID restriction which would result in increasing the near future demand for oil. In addition, the group of G7 and Australia has agreed to set a fixed price when they finalize a price cap on Russian oil in order to limit Russian’s revenues from oil.

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