Crude Oil Prices Rose Due to Increased Geo-political Tensions

 Lebanese Forex Market

The Euro appreciated against the LBP with the currency pair going from last week €/LBP 97,644.5 to €/LBP 97,787.7 by August 9^th, 2024. The Nominal Effective Exchange Rate (NEER) of the Lebanese pound slightly rose by 0.24% standing at 229.06 points on August 9^th, 2024.

International Forex Market

The USD Index (DXY) slightly declined by 0.05% to reach 103.16 on August 9^th, 2024 as US Department of Labor revealed better than expected labor market data after fears of economic recession, in which initial jobless claims fell by 17,000 and recorded 230,000 and below market expectation of 240,000.

The Euro appreciated against the dollar by 0.17% over the course of the week and reached EUR/USD 1.0926 by August 9^th, 2024 after the concerns raised regarding potential US economy recession based on weak economic data revealed end of last week. In addition, traders are expecting a 50 bps interest rate cuts by European Central Bank (ECB) in September.

British Pound slightly depreciated against the dollar by 0.23% over the course of the week and reached GBP/USD 1.2769 by August 9^th, 2024. For other currencies in Europe, the Swiss Franc depreciated by 0.99% by the end of this week to stand at USD/CHF 0.866 on Friday August 9^th, 2024.

Elsewhere, the Japanese Yen depreciated by 0.42% to reach USD/JPY 147.15 as investors are digesting Bank of Japan decision regarding interest rates where deputy governor stated this week that the central bank is not going to raise the rates. Similarly, the Chinese Yuan slightly depreciated by 0.2% to reach USD/CNY 7.1744 by August 9^th, 2024.

Furthermore, the Australian and Canadian dollar appreciated respectively over the course of the week by 1.28% and 1% to stand at AUD/USD 0.6592 and USD/CAD 1.3733 on Friday August 9^th, 2024.

 Commodities

Gold prices slightly rose by 0.09% over the course of the week to reach $ 2423.72 / ounce on Friday August 9^th, 2024. At the beginning of the week, gold fluctuated where it increased on Monday after the raised concerns of recession in the US economy, then it decreased below $ 2,390 on Wednesday after the strengthening of the US dollar. Later, gold retained its previous levels and increased above $ 2,420 level due to increased geo-political tensions.

Brent crude oil prices increased by 2.94% over the course of the week to reach $79.07 / barrel due to escalating geo-political tensions in the Middle East where investors are concerned about the potential retaliatory strikes on Israel after its strikes on Tehran and Beirut last week. Moreover, the disruption in Libya’s largest oil field “Sharara” partly affected oil prices. Furthermore, the potential US economy recession will affect other economies worldwide, thus disrupting OPEC+ plan to increase supply of oil, therefore OPEC+ might not proceed with October plan or stick to the plan and expect a decrease in prices.

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