| 02/02/2024 | 26/01/2024 | %Change | YTD | |
| Euro / LP | 16,318.50 | 16,228.50 | 0.55% | -1.63% |
| Euro / Dollar | 1.0879 | 1.0819 | 0.55% | -1.63% |
| NEER Index | 243.08 | 242.85 | 0.09% | 0.92% |
Lebanese Forex Market
The Lebanese Pound (LBP) remained steady within the new official rate of USD/LBP 15,000 by February 02, 2024.
The Lebanese exchange rate has maintained a relatively stable exchange rate of approximately 89,700 USD/LBP in the past month. It’s crucial to recognize that this stability isn’t backed by robust fundamentals despite recent approval of the 2024 Government Budget. Given the ongoing financial crisis and the absence of a recovery plan concerns persist due to uncertainties about Lebanon’s future and the broader regional context.
As for the Euro/LBP currency pair, the Euro appreciated against the dollar-pegged LBP with the currency pair going from last week €/LBP 16,228.50 to €/LBP 16,318.50 by February 02, 2024. The Nominal Effective Exchange Rate (NEER) of the Lebanese pound slightly increased by 0.09% standing at 243.08 points on February 02, 2024.
International Forex Market
The USD Index (DXY) decreased by 0.66% to stand at 103.014 on February 02, 2024, following Chair Jerome Powell’s comment about moving patiently towards rate cuts at the next meeting. This came against a backdrop of a still-solid US economy while Fed’ officials are monitoring closely the upcoming inflation data and its downward trend.
The Euro appreciated against the dollar by 0.57% over the course of the week and reached EUR/USD 1.0881, partially due to the weaker US Dollar (USD). Euro-zone inflation surprised on the upside in early 2024, casting doubt on investor hopes for an imminent interest rate cut by the European Central Bank.
The British Pound appreciated against the Dollar by 0.55% to reach GBP/USD 1.2755 by February 02, 2024 as BOE has raised prospect of rate cuts in 2024 if inflation tapered while holding interest rates steady.
For other currencies in Europe, the USD/CHF edged lower by 1.19% by the end of this week to stand at USD/CHF 0.8574 on Friday February 02, 2024. Elsewhere, the USD/CNY and USD/JPY pair depreciated respectively by 0.01% and 0.79% to stand at USD/CNY 7.1798 and USD/JPY 146.60 on Friday February 02, 2024. Furthermore, the USD/CAD pair depreciated by 0.71% to stand at USD/CAD 1.3375 by Friday February 02, 2024, while the AUD/USD saw a slight uptick of 0.11% to stand at 0.6590 by the end of this week.
Commodities
Gold prices climbed significantly this week registering a gain of 1.62% to stand at $2,054.4/ounce on February 02, 2024 fueled by investor belief in an earlier-than-expected US rate cut, despite recent uncertainties about its timing. While the Federal Reserve didn’t explicitly mention rate cuts in their policy statement due to missing inflation data, previous signals (like the “Summary of Economic Projections”) suggested a 0.75% reduction in 2024. However, gold may still face volatility as investors expect slower wage growth and moderating labor demand due to the Fed’s extended period of high interest rates.
Oil prices are poised for another weekly climb of 3.08% to reach $79.2/barrel by the end of this week. The increase was fueled by optimism surrounding potential ceasefire talks between Hamas and Israel. Further supporting the uptick, the OPEC+ group, as expected, opted to maintain current oil production levels during their meeting on Thursday. While no additional cuts were announced, it’s important to note that OPEC+ members are already adhering to collective reductions of 2.2 million barrels per day (bpd). This includes Saudi Arabia’s previously announced voluntary cut of 1 million bpd. Meanwhile, the Yemeni Houthis continued targeting ships in the Red Sea, with the latest attack announced by the group itself on Thursday, on an unidentified British merchant ship.