Gold Hits All-Time High of $2,572.4 / Ounce on Friday

Lebanese Forex Market

_{*Prices are as of the time of writing this report}

 The Nominal Effective Exchange Rate (NEER) of the Lebanese pound rose by 0.06% this week against a basket of 21 influential currencies, including the US Dollar and Euro, and recorded 229.7 points on September 13^th, 2024. Since the start of the year, the NEER Index fell by 4.64%. The decline is attributed to the US Dollar’s sharp decline this year, which led to a decrease in the Lebanese Lira’s valuation against other currencies since the Lebanese Lira’s conversion rate to the US Dollar has been stable since January 2024.

International Forex Market

_{*Prices are as of the time of writing this report}

 In international currency markets, the US Dollar index, a measure of the US currency’s strength against a basket of six rivals, decreased by 0.19% this week to 100.98 points. The decrease in the index is attributed to increasing probability of more aggressive rate cut of 50bps in Federal Reserve’s next week meeting.

The Euro slightly increased against the dollar in line with the dollar index’s decline. Moreover, the European Central Bank (ECB) lowered borrowing costs on Wednesday by 60 bps to reach 3.65%. Traders are also expecting one or two more 25 bps cuts in October.

 Commodities

 _{*Prices are as of the time of writing this report}

 In commodity markets, both Brent crude oil and West Texas Intermediate (WTI) crude oil rose over the course of the week and recorded the first week gain in five weeks. Supply concerns increased due to Francine hurricane hitting the US Gulf of Mexico and shutting down 42% of crude oil production in that area (i.e. 730 thousand barrels per day). However, despite the short term effect of the hurricane Francine, the broader economic concerns as China’s economic growth is slowing down in addition to the increase in the usage of electric cars signaling a potential decrease in oil prices in the near future.

Brent crude, the global oil benchmark, rose by 1.82% this week to $72.35 a barrel and West Texas Intermediate, the US equivalent, increased 2.54% during the same period to $69.39 a barrel.

Gold increased by 3% over the course of the week and surpassing the $2,570 per ounce level, reaching all time-high of $2,572.4, as traders now are increasing their expectations of a 50 bps rate cut in the Federal Reserve’s meeting next week after the release of labor market data on Thursday showing increase initial jobless claims.

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