USD/EGP Outlook:
The USD/EGP rate is slightly positive and likely to move sideways, currently trading about 1.3% above its 90-day average. It is within the stable range and lacks a clear driver for significant movement.
Key drivers:
• Rate gap: The Fed's recent rate hikes have kept the USD strong compared to the EGP due to higher returns on investments.
• Risk/commodities: Geopolitical tensions continue to support the safe-haven USD, amidst steady oil prices.
• One macro factor: Recent forecasts indicate Egypt's economy could grow by 5.5% in 2026, boosting confidence in the EGP.
Range:
The USD/EGP is expected to hold within its recent 3-month range, showing limited volatility.
What could change it:
• Upside risk: A surprise increase in US economic data could lead to higher demand for the USD.
• Downside risk: A significant drop in global commodity prices may weaken the USD and benefit the EGP.