Gold Hits 7-Month High amid Middle East Conflict and Fed Uncertainty

Euro / LP15,805.5015,879.00-0.46%884.63%
Euro / Dollar1.05371.0586-0.46%-1.05%
NEER Index239.45239.460.00%40.41%

Lebanese Forex Market

The Lebanese Pound (LBP) remained steady within the new official rate of USD/LBP 15,000 by October 13, 2023.

Surprisingly on the parallel market, the Lebanese national currency remained steady this week with almost same average as previous week of 89,680 LBP/USD. The pair LBP/USD recorded a minimum of 89,500 LBP/USD and a maximum of 89,700 LBP/USD during the course of this week despite the potential escalation of war between Israel and Hamas to Lebanon that raises significant concerns on multiple fronts. The consequences of this scenario are far-reaching, making it a cause for heightened sectarian tensions and even a spillover of violence.

As for the Euro/LBP currency pair, the Euro depreciated further against the dollar-pegged LBP with the currency pair going down from last week €/LBP 15,879 to €/LBP 15,805.50 by October 13, 2023. The Nominal Effective Exchange Rate (NEER) of the Lebanese pound remained steady for this week standing at 239.45 points on October 13, 2023.

International Forex Market

This week, the dollar currency gathered strength against its rivals following September CPI data and the dollar index broke a six day losing trend to stand at 106.312, 0.26% higher than previous week. In fact, inflation in US stayed at 3.7% same as August data that made investors relatively quiet, awaiting speeches from Central Bankers.

In turn, the Euro currency remained under selling pressure and traded in negative territory for this week. The EUR/USD pair currently trades near 1.0533 down by 0.50% from previous week. The currency pair has faced a pullback driven by an optimistic economic data from the US that undermined the EUR/USD pair. In the Eurozone, fears of an economic slowdown are underlining a cautious approach by the ECB which could lead to further rate hikes in the near future.

As for the UK, the British pound recovered somehow on Friday but remained 0.42% lower at 1.0533 GBP/USD compared to previous week. The UK economic data has failed to implement confidence in the British currency as the manufacturing and industrial production figures fell short of expectations. Manufacturing production declined by 0.8% in August, beyond the 0.4% decline forecasted and wavering down from the previous month’s dip of 1.2%.

For other currencies in Europe, the USD/CHF edged lower by 0.33% by the end of this week to stand at USD/CHF 0.9069 despite lower than expected inflation data in September. CPI in September came below Swiss National Bank target rate of 2% and stood at -0.1% on a monthly basis and +1.7% on a yearly basis.

Meanwhile, the USD/JPY pair kept its positive momentum for this week and recorded a 0.23% gain to stand at USD/JPY 149.66 on Friday October 13, 2023 while the USD/CNY pair slightly added 0.09% by the end of this to reach USD/CNY 7.3076. Japan market is expecting a slowdown in the Chinese economy; as such, most of firms are looking to shift some production elsewhere in search of sales in markets other than Chinese market. This cautious behavior is present even though latest data showed that China’s factory activity in September expanded for the first time in six months, with sales growth accelerating in August 2023.

Elsewhere, the Australian depreciated by 0.97% from the previous week to stand at 0.6321 AUD/USD on Friday October 13, 2023. Meanwhile, the USD/CAD pair remained somehow stable with a slight increase of 0.08% to stand at USD/CAD 1.3672, by Friday October 13, 2023 driven by rebound in oil prices, as the country is the leading oil exporter to the United States.


Gold prices experienced the strongest weekly gains in over seven months certainly maintained by tensions in Middle East as well as Fed uncertainty regarding further rate hikes. The ongoing Israel-Hamas conflicts strengthened gold’s position in the market and placed the yellow metal again as a safe haven. As such, gold prices increased by 2.55% to stand at 1,878.99/ounce on Friday October 13, 2023.

Oil prices jumped by 3.01% by the end of this week to $87.13/barrel on fears that the war in Palestine could lead to another supply disruption output from the Middle East. Oil prices have steadily risen since Saudi Arabia announced its production cuts while other members of OPEC+ also agreed to continued cuts in an attempt to shore up flagging prices. These decisions can have a major impact on oil prices, especially in time of conflicts.


Leave a Reply

Your email address will not be published. Required fields are marked *