| 15/12/2023 | 08/12/2023 | %Change | YTD | |
| Euro / LP | 16,473.00 | 16,141.50 | 2.05% | 926.21% |
| Euro / Dollar | 1.0982 | 1.0761 | 2.05% | 3.13% |
| NEER Index | 240.17 | 240.56 | -0.16% | 40.83% |
Lebanese Forex Market
The Lebanese Pound (LBP) remained steady within the new official rate of USD/LBP 15,000 by December 15, 2023.
The Lebanese exchange rate has been hovering consistently around 89,700 USD/LBP over the past month. It is important to note that the Lebanese currency has showed stability recently though it is not stable as uncertainty and worries are still looming with no recovery plan has been put on table to solve the ongoing financial crisis in the country.
As for the Euro/LBP currency pair, the Euro appreciated against the dollar-pegged LBP with the currency pair going from last week €/LBP 16,141.50 to €/LBP 16,473 by December 15, 2023. The Nominal Effective Exchange Rate (NEER) of the Lebanese pound decreased by 0.16% standing at 240.17 points on December 15, 2023.
International Forex Market
The USD Index (DXY) dropped to a low of 102.004 on December 15, 2023 as the Federal Reserve signaled that U.S. interest rate hikes have come to an end and that lower borrowing costs are coming in 2024. Indeed, the Fed said it expects 75bps of rate cuts in 2024 from its current 5.5% benchmark rate. Nevertheless, Jerome Powell suggested that the option to increase interest rates remains open if needed.
The Euro appreciated against the dollar by 2.1% over the course of the week and reached a high figure of EUR/USD 1.0989 after the ECB left interest rates steady at multi-year highs as expected, and reinforced borrowing costs are set to remain elevated for some time. The central bank refrained from making any notes on rate cuts for next year. In fact, President Lagarde said that policymakers did not discuss any rate cuts, reiterating that future decisions would be data-dependent.
The British Pound appreciated against the Dollar by 1.71% to reach GBP/USD 1.2763 by December 15, 2023 after the Bank of England kept door ajar for further rate hikes. Indeed, GBP is reacting positively to the unchanged Bank of England rate decision, which remained at 5.25% at the December policy meeting, and the Monetary Policy Committee (MPC) signaled it is ready to raise interest rates again if needed.
For other currencies in Europe, the USD/CHF edged lower by 1.53% by the end of this week to stand at USD/CHF 0.8664 on Friday December 15, 2023. Elsewhere, the USD/CNY and USD/JPY pair appreciated respectively by 0.83% and 2.13% to stand at USD/CNY 7.1105 and USD/JPY 141.86 on Friday December 15, 2023.
Moreover, the USD/CAD pair appreciated by 1.44% to stand at 1.3387 by December 15, 2023. Indeed, the Canadian dollar is getting additional support because the spread between Canadian and US 10-year bond yields narrowed by over 12 bps and from the rebound in commodity prices. Similarly, the AUD/USD saw an increase by 1.96% to stand at 0.6708 by the end of this week.
Commodities
Gold headed for a weekly gain, reaching a multi high level of 2,037.96 by December 15, 2023. Indeed, this week, Fed policymakers reported that they expected to lower rates by 75 basis points next year. Cooling inflation had already pushed investors to position for easing, spurring bullion to briefly spike to a record high.
Crude oil prices increased by 0.88% over the course of the week to stand at $71.86/ barrel on a bigger-than-expected weekly withdrawal from U.S. crude storage and on worries about the security of Middle East oil supplies after a tanker attack in the Red Sea.