| 05/04/2024 | 29/03/2024 | %Change | YTD | |
| Euro / LP | 97,044.85 | 96,579.45 | 0.48% | 486.23% |
| Euro / Dollar | 1.0843 | 1.0791 | 0.48% | -1.75% |
| NEER Index | 241.22 | 241.77 | -0.23% | 0.14% |
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 April 05, 2024. It’s crucial to recognize that this stability isn’t backed by robust fundamentals. Given the ongoing financial crisis and the absence of a recovery plan, Lebanon’s future remains uncertain and unstable.
As for the Euro/LBP currency pair, the Euro appreciated against the dollar-pegged LBP with the currency pair going from last week €/LBP 96,579.45 to €/LBP 97,044.85 by April 05, 2024. The Nominal Effective Exchange Rate (NEER) of the Lebanese pound marginally decreased by 0.23% standing at 241.22 points on April 05, 2024.
International Forex Market
The USD Index (DXY) decreased by 0.31% to stand at 104.23 on April 05, 2024 as Fed Chair Jerome Powell is concerned about the key US jobs report and the Federal Reserve officials introduced uncertainties on the timing of potential rate cuts.
The Euro appreciated against the dollar by 0.42% over the course of the week as dollar weakened and Euro area inflation fell below the anticipated 2.6% and recorded 2.4% in addition to rise in PMIs after 10 months of contraction.
The British Pound also appreciated against the dollar by 0.1% over the course of the week and reached GBP/USD 1.2636, as markets awaiting US job data before deciding to sustain the currency selling trend or not.
For other currencies in Europe, the Swiss Franc appreciated by 0.18% by the end of this week to stand at USD/CHF 0.9032 on Friday April 05, 2024.
Elsewhere, the USD/CNY appreciated by 0.18% to stand at USD/CNY 7.233 on Friday April 05, 2024. Moreover, the Canadian and Australian dollars appreciated respectively by 0.17% and 0.92% to stand at USD/CAD 1.356 and AUD/USD 0.6581 by Friday April 05, 2024.
Furthermore, the Japanese Yen appreciated by 0.06% over the course of the week to stand at USD/JPY 151.4 on Friday April 05, 2024. Last week, the Bank of Japan has ended an era of negative interest rates, raising borrowing costs for the first time since 2007 in a historic shift as the country puts decades of deflation behind it; however this action did not make much changes to the prevailing market dynamics dominated by the Fed.
Commodities
Gold prices increased by 2.5% over the course of the week to reach $2,288.09/ ounce on Friday April 05, 2024. This week, the precious metal rose significantly to a record all-time highest of $2,305.64/ ounce on Thursday before dropping to $2,288.09. The gold’s gain this week was reinforced by several incidents. First, the elevated tension in the Middle East and a potential revenge from Tehran after Israel’s Monday attack on an Iranian diplomatic compound in Syria. Moreover, the ongoing China’s economic difficulties due to China’s real estate crisis continued to roll given that property and its related activities represents around 30% of China’s Gross Domestic Product and 70% of household wealth.
Gold then retreated after hitting all-time high record as investors are cautious ahead of Friday’s US Jobs data in addition to next week’s US inflation readings that will probably influence May and June Fed decisions. Investors grasped some updates regarding interest rate cuts. First, on Wednesday, Fed Chair Jerome Powell stated that they need more signs that the inflation rate is progressing towards the targeted 2% in a sustainable fashion. Moreover, the day after, Minneapolis Fed President Neel Kashkari stated that if inflation remained sticky, no rate cuts may be required this year.
Crude oil prices increased by 4.22 % and reached $91.17 on April 05, 2024. The price increase is linked to 2 major events. First, the increase in geo-political tensions in the oil producing regions mainly in Middle East and Russia where the latter’s refineries were attacked by Ukrainian drones and led to a disruption in more than 15% of the Russian capacity. Second, OPEC+ members led by Saudi Arabia and Russia agreed to extend voluntary output cuts of 2.2 million barrels per day until June in order to stabilize the market. This was revealed after the announcement of Russian Deputy Prime Minister Alexander Novak of reducing oil production in the second quarter of 2024 in line with the other OPEC+ countries.
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