| 15/03/2024 | 08/03/2024 | %Change | YTD | |
| Euro / LP | 97,402.85 | 97,886.15 | -0.49% | 488.39% |
| Euro / Dollar | 1.0883 | 1.0937 | -0.49% | -1.39% |
| NEER Index | 239.70 | 239.40 | 0.13% | -0.49% |
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 15, 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 97,886.15 to €/LBP 97,402.85 by March 15, 2024. The Nominal Effective Exchange Rate (NEER) of the Lebanese pound marginally increased by 0.13% standing at 239.7 points on March 15, 2024.
International Forex Market
The USD Index (DXY) increased by 0.71% to stand at 103.445 on March 15, 2024 due to recent revealed US data in which US inflation increased to 3.2% in February compared to 3.1% in January in addition to the increase in US producer prices and US consumer prices.
The Euro depreciated against the dollar but remained close to $1.09 as European Central Bank is seen lowering borrowing costs.
The British Pound remained at around $1.28 reinforced by a batch of economic data while anticipating the Bank of England’s (BoE) interest rate decisions next week. GDP figures publicized on Wednesday revealing a 0.2% growth in Britain’s economy in January compared to prior month driven by retail and house-building figures. It is interesting to note that BoE is anticipated to maintain interest rates at 5.25% next Thursday with expectation among investors that interest rate cuts will begin in August.
For other currencies in Europe, the USD/CHF edged higher by 0.79% by the end of this week to stand at USD/CHF 0.884 on Friday March 15, 2024.
For other global currencies, the USD/CNY increased slightly by 0.13% to stand at 7.1966 on Friday March 15, 2024. Similarly, USD/JPY pair increased by 1.16% to stand at USD/JPY 148.76 on Friday March 15, 2024. Furthermore, the USD/CAD pair appreciated by 0.47% to stand at USD/CAD 1.3546 by March 15, 2024, while the AUD/USD saw a downtick of 1.03% to stand at 0.6556 by the end of this week.
Commodities
Gold kept its recent marginal decline to below $2,170 per ounce on Friday despite stronger than expected US inflation data. Earlier this week, data regarding Consumer Prices reached more than expected last month and increased by 0.4%. This was followed by US inflation data more than the expected and recorded 3.2% in February compared to 3.1% in January. Moreover, Thursday data showed that US producer prices of February increased more than anticipated on both monthly and annually basis. In addition, a sharp rebound in both Treasury yields and the dollar pressured the gold. Nevertheless, gold traded near the record high as Fed Chair Jerome Powell and several European Central Bank members declared last week that rate cut would likely begin at some point in 2024.
Crude oil increased by 3.89% during this week and recorded $85.27/barrel by March 15, 2024 amid ongoing tensions in the Middle East and Red Sea and the uncertainty about ceasefire talks in Gaza strip. Moreover, oil prices got further support this week after the fire at Rosneft’s largest refinery in Russia due to Ukrainian drone attacks. Furthermore, OPEC’s output cuts since late 2022 help stabilize the market and will be extended to cover the second quarter of 2024. OPEC’s monthly expected oil demand to increase by 2.25 million barrels per day (bpd) and by 1.85 million bpd in 2025 as per previous estimates.
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