US Dollar Rebounds as Debt Ceiling Optimism Grows


Euro / LP16,087.5016,164.00-0.47%902.19%
Euro / Dollar1.07251.0776-0.47%0.72%
NEER Index119.19119.060.10%-30.11%

Lebanese Forex Market

The Lebanese Pound (LBP) remained steady within the new official rate of USD/LBP 15,000 by May 26, 2023.

On the parallel market, the Lebanese national currency remained steady this week with an average of 94,530 LBP/USD. The pair LBP/USD recorded a minimum of 94,500 LBP/USD and a maximum of 94,800 LBP/USD during the course of this week. Surprisingly, the Lebanese Lira was not affected by the juridical development as Lebanon has received Interpol arrest warrant for central bank Governor Riad Salame.

As for the Euro/LBP currency pair, the Euro slightly depreciated against the dollar-pegged LBP with the currency pair going from last week €/LBP 16,164 by May 19, 2023 to 16,087 by May 26, 2023. The Nominal Effective Exchange Rate (NEER) of the Lebanese pound went up slightly by 0.10% weekly to stand at 119.19 points on May 26, 2023.

International Forex Market

This week, the US dollar bounced back against major currencies as the dollar index increased by 0.64% on a weekly basis to 104.114 on May 26, 2023. Despite the absence of a finalized debt ceiling deal, recent developments have generated optimism that an agreement can be reached before the deadline. Speaker McCarthy’s statement, indicating that not everyone will be satisfied, suggests a potential compromise and brings the parties closer to a resolution. According to report news, the difference between the two sides regarding discretionary spending levels is now only $70 billion, and the overall deal is expected to be smaller than initially anticipated. Following the close of the US market, the Treasury revealed a decrease in cash balances to $49.5 billion, down from $76.5 billion the previous day and $140 billion on May 12, indicating that the X-date is approaching.

The Euro depreciated against the dollar by 0.47% to $1.0728. During the week, the market received a hawkish comment from ECB board member Knot  who said that rate hikes were needed over the next two months, and  he would consider a rate hike in September, and finally that the market pricing of rates cuts is overly optimistic.

The British pound also depreciated against the US dollar by 0.51% to stand at $1.2338 by the week ending May 26, 2023. During the week, Governor Baily expressed concerns about the possibility of ongoing inflation, emphasizing the existence of  risks. In contrast, Catherine Mann, the most hawkish member of the MPC, clarified that there is a distinction between “tightening and tight” and noted that real interest rates are still in negative territory. As a result, investors increased their expectations for future interest rate hikes, with the terminal rate now being priced at over 5%.

This week, the USD/JPY increased by 1.19 % to reach 136.28 by May 26, 2023. Elsewhere, the Australian dollar depreciated by 1.93% on a weekly basis to stand at 0.652 AUD/USD by May 26, 2023. In contrast, the Canadian dollar appreciated by 1.07% on a weekly basis to reach CAD 1.3628for a US dollar.


Gold markets retreated this week amid a stronger dollar, with gold prices decreasing by 0.76% to $1950.75/ounce.

Crude oil prices were almost unchanged, and remained steady at $76.39/barrel.  In fact, oil prices were oscillating between gains and losses during the week amid conflicting messages from Russia and Saudi Arabia ahead of the next OPEC+ policy meeting

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