Gold prices on the rise amid traders’ concerns over global banking crises

Euro / LP16,174.5015,999.001.10%907.61%
Euro / Dollar1.07831.06661.10%1.27%
NEER Index116.86117.10-0.21%-31.47%


Lebanese Forex Market

The Lebanese Pound (LBP) remained steady within the new official rate of USD/LBP 15,000 by March 24, 2023.

Lebanon’s currency hit a new low of 141,000 to the US dollar on March 21st according to the unofficial market rates. In more details, this week, the Lebanese pound oscillated around LBP 114,300 per USD and ended the week at LBP 107,000 per USD.

As for the Euro/LBP currency pair, the Euro slightly appreciated against the dollar-pegged LBP with the currency pair going from last week €/LBP 15,999 by March 17, 2023 to 16,174.5 by March 24, 2023. Moreover, the Nominal Effective Exchange Rate (NEER) of the Lebanese pound went down by 0.21% weekly to stand at 116.86 points on March 24, 2023.

International Forex Market

This week, the US dollar traded on a negative territory after the Federal Reserve announced a quarter-point interest rate hike on March 22nd.  In more details, the DXY index dropped by -0.77% on a weekly basis and traded at 102.908 by Friday March 24, 2023. Consequently, investors are still assessing the outlook for Federal Reserve monetary policy as the central bank aims to balance the fight against inflation with lingering concerns about the banking crisis.

The Euro appreciated remarkably against the dollar by +1.07% to $1.0784 amid weaker US dollar. The euro appreciated weekly despite renewed concerns over the health of the banking sector. Moreover, on the monetary policy front, Bundesbank President Joachim Nagel signaled that ECB would likely further increase interest rates to tackle inflation.

The British pound also appreciated against the US dollar by +0.65% to stand at $1.2252, despite renewed banking concerns following reports that UBS and Credit Suisse are under scrutiny in a US Justice Department probe into whether financial professionals helped Russian oligarchs evade sanctions. Still, the sterling is set for a second consecutive week of gains, after the Bank of England raised its key bank rate by 25bps to 4.25%, as largely expected, and signaled further rate hikes if inflation persists. The latest data showed a sustained increase in UK private sector output, largely reflecting a strong performance by the service economy. The PMIs survey suggested that the UK economy grew by 0.2% from the preceding quarter in the first three months of 2023.

On Friday, the Yen appreciated against the US dollar by +1.40% on a weekly basis to stand at 130.01 USD/ JPY hitting its strongest levels in six weeks after data showed that Japan’s annual core inflation rate slowed sharply in February, but an index removing energy costs hit a four-decade high. On the monetary policy front, minutes from the Bank of Japan’s January meeting showed members reiterated the need to maintain ultra-easy policies, as it takes time to reach the 2% inflation target in a sustainable and stable manner. The BOJ left its policy of ultra-low interest rates unchanged at the March meeting, in what was Governor Haruhiko Kuroda’s final policy meeting before his retirement.

In China, the Yuan appreciated against the dollar by +0.26% to 6.8691 on a weekly basis. In fact, China is a “relative safe Haven” in the face of global banking stress and is expected to be a major growth hedge this year. Moreover, according to Citi economists the decision by the People’s Bank of China to cut its required reserved ratio showed reassurance of policy support amid global volatilities.

Elsewhere, the Australian dollar depreciated by -0.46% on a weekly basis to stand at 0.6666 AUD/USD by March 24, 2023. Similarly, the Canadian dollar depreciated by 0.12% on a weekly basis touching CAD$ 1.3747 for a US dollar.


Gold prices rose by 0.37% weekly to stand at $1996.57/ ounce as the dollar weakened and traders are betting that the Federal Reserve’s aggressive monetary-tightening cycle is nearing an end. In fact, this week the gold reached its biggest weekly gain since March 2020 as traders are concerned over global banking sector turmoil and are opting for less risky options. Thereby, gold may reach a record high if financial stability concerns do not ease.

Crude oil’ prices increased remarkably by 3.6% to stand at $69.14/barrel on March 24, 2023 compared to $66.74/barrel in the previous week. In fact, China’s demand indicators remain broadly positive, forming a strong fundamental backdrop for prices beyond the very near term. Moreover, an upcoming emergency rescue of Credit Suisse Group helped revive oil prices.

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