President Trump’s Speech Pushes Gold Prices Up and Crude Oil Prices Down
| 24/01/2025 | 17/01/2025 | % Change | YTD | |
| Euro / LP | 93,214.25 | 91,925 | 1.40% | 0.60% |
| Euro / Dollar | 1.0415 | 1.0271 | 1.40% | 0.60% |
| NEER Index | 234.37 | 234.79 | -0.18% | 0.07% |
*Prices are as of the time of writing this report
The Nominal Effective Exchange Rate (NEER) of the Lebanese pound decreased marginally this week against a basket of 21 influential currencies, including the US Dollar and Euro, and recorded 234.37 points on January 24th, 2025. Since the start of the year, we notice that the NEER Index rose by 0.07%.
International Forex Market
| 24/01/2025 | 17/01/2025 | % Change | YTD | |
| Dollars index = DXY | 107.48 | 109.347 | -1.71% | -0.93% |
| EUR/USD | 1.0415 | 1.0271 | 1.40% | |
| GBP/USD | 1.2385 | 1.2163 | 1.83% | |
| USD/CHF | 0.9046 | 0.915 | -1.14% | |
| USD/CNY | 7.2393 | 7.3249 | -1.17% | |
| USD/JPY | 155.76 | 156.31 | -0.35% | |
| AUD/USD | 0.6319 | 0.619 | 2.08% | |
| USD/CAD | 1.4324 | 1.448 | -1.08% |
*Prices are as of the time of writing this report
In international currency markets this week, the US Dollar index, a measure of the US currency’s strength against a basket of six rivals, decreased by 1.71% to 107.48 attributed to Trump’s speech at the World Economic Forum in Davos on late Thursday to cut interest rates instantly. In addition, Trump signaled softer than expected tariffs to be imposed on China, Mexico and Canada in which he is planning to impose 10% on China imports and 25% on imports from both Mexico and Canada. Moreover, President Trump stated in the same event that he is planning to deal with the trade deficit with European Union as the European tariffs on American goods is making it expensive in Europe. Furthermore, traders are waiting for PMI released by S&P Global later today as any contraction in the American private sector will exert additional downward pressure on the USD.
The euro appreciated by 1.40% reaching 1.0415 this week as traders are now betting on 90 bps interest rate cuts by the European Central Bank (ECB) till year end compared to 100 bps at the beginning of the year. In addition, private sector in the Euro Area expanded in January 2025 as Composite PMI exceeded 50 level and recorded 50.2 compared to 49.6 in December 2024.
Similarly, the British pound appreciated this week against the US dollar by 1.83% reaching 1.2385 as PMI unexpectedly increased in January as both services and manufacturing PMIs improved. Despite that, there are some fears regarding decrease in new orders, and input prices and decrease in employment. However, it is still expected the Bank of England (BoE) will perform a 25 bps rate cut in its February meeting.
In Asian forex markets, Japanese yen appreciated by 0.35% over the course of the week recording 155.76 as Bank of Japan (BoJ) increased interest rates on Friday January 24th, 2025 after a two-day meeting. Interest rates reached 0.5%, marked the highest since 2008.
Similarly, Chinese Yuan appreciated by 1.17% to record 7.2393 on January 24th, 2025 due to the weakening of USD after Trump’s speech in World Economic Forum in Davos as he hinted for instant interest rate cuts.
Commodities Market
| 24/01/2025 | 17/01/2025 | % Change | |
| Gold | 2773.06 | 2703.25 | 2.58% |
| Brent Crude Oil | 78.57 | 80.79 | -2.75% |
| WTI Crude Oil | 74.89 | 77.88 | -3.84% |
*Prices are as of the time of writing this report
In commodity markets, Gold prices are set to end the week with gains for the fourth consecutive week as it reached $2773.06/ounce on Friday close to all-time high of $2790/ounce after Trumps speech regarding interest rate cuts in addition to the uncertainty concerning Trump’s potential tariffs and immigration policies.
As for both oil benchmarks, Brent and West Texas Intermediate (WTI) prices dropped by 2.75% and 3.84% respectively recording $78.57/barrel and $74.89/barrel. The decrease is driven by Trump’s speech in World Economic Forum meetings as he urged Saudi Arabia and OPEC to decrease oil prices to meet his administration’s priorities. In addition, there are some concerns on global economic growth in case Trump implemented the planned tariffs.
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