Gold Rallied Back Above $1,900/Ounce; despite Tapered Inflation, High Interest Rates policy is not Over Yet

Euro / LP1,634.881,632.110.17%1.85%
Euro / Dollar1.08451.08270.17%1.85%
NEER Index171.07170.620.26%0.32%

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 January 20, 2023.

Meanwhile on the parallel market, the Lebanese national currency witnessed a sharp fall this week and surpassed the levels of 50,000 LBP/USD and registered a 6% drop from 48,100 LBP/USD to all-time high levels of 51,100 LBP/USD during the period between 16 and 20 January 2023 with a minimum of 47,600 LBP/USD and an average of 49,147.44 LBP/USD by the end of the week January 20, 2023.

As for the Euro/LBP currency pair, the Euro appreciated against the dollar-pegged LBP with the currency pair going from last week €/LBP 1,632.11 by January 13, 2023 to €/LBP 1,634.88 by January 20, 2023. Moreover, the Nominal Effective Exchange Rate (NEER) of the Lebanese pound increased by 0.26% weekly to stand at 171.07 points on January 20, 2022.

International Forex Market

On Friday, the US dollar remains under pressure around 102.18 as it failed to recover from the lowest previous levels last week. In doing so, the green currency slightly dropped against other major currencies as retail sales in December fell by 1.1% compared to November data driven by consumers’ fears towards a recession despite the recent Federal Reserve talk of slowing the pace of interest rate hikes.

The market continued to price the Euro currency at more aggressive levels. The Euro currency has gotten a further appreciation and ended the week 0.17% higher at $1.0845 which keeps the door open for bears.

Meanwhile, the GBP/USD has been leading the way this week, with the pair running to move higher throughout a concerned period and traded 1.05% higher at $1.2361 by the end of this week. However, the positive territory could come into question soon, with an undesirable drop in UK retail sales pushing the pound to weak.

Concerning the Japanese currency, the Yen traded at 129.64 this Friday January 20, 0.78% slightly higher than last week previous 128.64 despite the surprising announcement of Bank of Japan of keeping its yield curve control unchanged.

Back to China, the Yuan led the Asian currencies this week by outperforming against the dollars and ended the week 1.07% higher at $6.7800. Although data revealed that economic growth in China was hit hard by coronavirus strict policy and slumped to one of its worst levels in near history, however, the outlook for the Asian currency has broadly improved on the back of the relief on the US inflation and the implications on the Fed’s policy.


Yellow metal edge higher and recorded five consecutive weekly gains as investors are betting on the safe haven due to uncertainty over the next US Fed policy. In details, gold prices rallied back above $1,900 and recorded a 1.31% weekly gain to stand at $1,930.29/ounce on Friday January 20, 2023.

Crude oil’ prices recorded a significant jump by the end of the week and traded 2.89% higher to reach $86.6 on January 20, 2023 compared to the previous week of January 13. The increase in oil prices was driven by surging Chinese oil demand by nearly 1 million barrels per day from the previous month to 15.41 million bpd in November, the highest level since February.

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