The USD to EGP exchange rate has recently exhibited notable trends influenced by a range of domestic and international factors. Currently, the USD is trading at 48.16 EGP, which is approximately 1.8% below its three-month average of 49.03 EGP. This reflects a relatively stable trading range of 6.2%, oscillating between 47.93 and 50.91 EGP.
Analysts suggest that the ongoing tightening of monetary policy by the Central Bank of Egypt, evidenced by the anticipated 100 basis point rate cut due to easing inflation, could further support the Egyptian pound. Egypt's inflation rate fell to 12.7% in August, down from 13.9% the previous month, largely credited to government measures and an IMF financial support deal secured in March 2024.
On the USD side, the currency has been rangebound amidst rising inflation figures that reached a seven-month high in August. However, investors appear to remain focused on expected interest rate cuts extending through 2025, which could exert downward pressure on the dollar's valuation. Significant factors such as the upcoming consumer sentiment index, potential Federal Reserve leadership changes, and global dedollarization trends are also influencing investor sentiment.
Furthermore, geopolitical elements like US-China trade tensions and the ongoing Mar-a-Lago Accord discussions are impacting market perceptions of the dollar. Experts warn that these factors could lead to shifts in investor behavior regarding the USD in the near term.
Economic forecasts for Egypt have been revised downward regarding GDP growth, mainly due to global tariff concerns, positioning the EGP under a cautious lens despite recent improvements. Overall, market dynamics suggest that traders and businesses involved in the USD to EGP exchange should remain vigilant to these influencing factors for better decision-making in international transactions.
