| 01/03/2024 | 23/02/2024 | %Change | YTD | |
| Euro / LBP | 16,213.50 | 16,243.50 | -0.18% | 1.23% |
| Euro / Dollar | 1.0812 | 1.0821 | -0.08% | 1.35% |
| NEER Index | 239.66 | 239.40 | 0.11% | 105.21% |
Lebanese Forex Market
Lebanese authorities announced the decision of unifying the LBP exchange rate against USD at 89,500 starting Feb 16 2024. This rate represents the BDL’s electronic platform rate which is used for calculating commercial banks and BDL’s balance sheet although the official exchange rate remains for the moment at USD/LBP 15,000.
The Lebanese exchange rate has maintained a relatively stable exchange rate of approximately 89,700 USD/LBP in the parallel market by March 01, 2024. 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 depreciated against the dollar-pegged LBP with the currency pair going from last week €/LBP 16,243.50 to €/LBP 16,213.50 by March 01, 2024. The Nominal Effective Exchange Rate (NEER) of the Lebanese pound marginally increased by 0.11% standing at 239.66 points on March 01, 2024.
International Forex Market
The USD Index (DXY) increased by 0.28% to stand at 104.131 on March 01, 2024 as market pricing of Federal Reserve’s easing in 2024 has been reduced.
Federal Reserve’s monetary easing approach became more measured approach in 2024 noting that interest rate cuts are anticipated in the second half of 2024 and most probably in June with limited magnitude given the inflation rate of 3.1% has become near the targeted rate of 2%. This interest rate cut expectation could provide some support for the US Dollar (USD) by preventing substantial downward pressure.
The Euro depreciated against the dollar due to the expectation of interest rate cuts by US Federal Reserve to begin in June 2024 but remained above $1.08 due to the rise in the outstanding unemployment claims in the US to their highest in three months in addition to the latest published inflation rates in Europe’s largest economies where the inflation rate in Germany recorded 2.5% that beats the anticipated rate of 2.6% and the inflation rate in France that eased and reached 2.9% and remained slightly above the expected rate of 2.7%.
The British Pound remained at around $1.265 reinforced by positive signals from Bank of England’s monetary indicators given the larger than anticipated increase in consumer lending of £1.9B compared to the expected £1.6B. Moreover, investors are anticipating interest rate cut by the Bank of England in August.
For other currencies in Europe, the USD/CHF edged higher by 0.48% by the end of this week to stand at USD/CHF 0.8853 on Friday March 01, 2024.
For other global currencies, the USD/CNY increased slightly by 0.04% to stand at 7.1984 on Friday March 01, 2024. Meanwhile, USD/JPY pair depreciated by 0.01% to stand at USD/JPY 150.49 on Friday March 01, 2024. Furthermore, the USD/CAD pair appreciated by 0.53% to stand at USD/CAD 1.3577 by March 01, 2024, while the AUD/USD saw a downtick of 0.95% to stand at 0.6498 by the end of this week.
Commodities
Gold headed for its second week gains and recorded $2,040 an ounce after several US data revealed. First, the latest US inflation data that revealed the expected rate keeping the bets of monetary easing and interest rate cuts in June 2024. Second, the Consumer Confidence Index decreased from 110.9 in January to 106.7 in February despite the economist’s forecasts of an increase to 114.8.
Oil prices increased by 3.78% this week and recorded $79.4/barrel by March 01, 2024 amid ongoing tensions in the Middle East and Red Sea and the uncertainty about ceasefire talks in Gaza strip; in addition to the rumors that OPEC+ will extend supply cuts in the March meeting where producers might implement a voluntary production limits. Furthermore, the latest EIA report revealed a better than anticipated rise in US crude stocks, mounting by 4,199 million barrels last week due to refinery process slowdown.