Demand for the Dollar Progressed in the Lebanese Forex Market

LBP-USD:

Demand for the dollar in the Lebanese Forex market improved during the week as the Lebanese pound increased against the dollar from $/LP 1,503–1,507 with a mid-price of $/LP 1,505 to $/LP 1,505–1,509 with a mid-price of $/LP 1,507. Foreign assets (excluding gold) at the Central Bank grew by a monthly 0.7% to reach $38.86B at the end of June. As for the dollarization rate of private sector deposits, it slid from 65.71% in December 2014 to 65.15% by May.

By Friday 8th of August, 2015, 11:30 pm Beirut time, the dollar-pegged LP appreciated against the euro going from €/LP 1,650.86 to €/LP 1,647.09. The Nominal effective exchange Rate (NEER) increased by a weekly 0.94% to 166.86 points, bringing its year-to-date gains to 13.26%.

Euro:

The euro was bearish against the dollar over the week, at it depreciated by 0.23% to €/$ 1.0926.  The eminent US interest rate hike by the Federal Reserve is expected to occur this year due to positive economic data keeping demand high for the green back. Furthermore, Greek economic data was far from encouraging as the country’s unemployment rate reached 25%, while its PMI manufacturing data, for the month of July, hit an all-time low of 30.2. On a better note, Athens made a 186.3M Euro interest payment to the IMF, today, which might bode well for the single currency.     

Gold:

Gold fell from last week’s quote of $1,091.26/ounce to $1,089.65/ounce, possibly because of a stronger dollar.

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