Recent shifts in the USD to EGP exchange rate reflect a complex interplay of factors affecting both currencies. Analysts report that the US dollar (USD) has experienced a decline amid increasing bets on a Federal Reserve rate cut, driven by concerning employment data. Over the past four weeks, an average of 11,250 jobs were lost each week, leading to a weakened labor market that further supported expectations for a dovish monetary policy from the Fed.
Moreover, broader geopolitical and economic uncertainties are also influencing the USD. Chief among them are ongoing US-China trade tensions, which are expected to have implications for various sectors, and the potential changes in Federal Reserve leadership, which could affect the overall direction of US monetary policy.
In contrast, the Egyptian pound (EGP) has shown signs of recovery, attributed to significant monetary policy adjustments. The Central Bank of Egypt's decision to cut interest rates by 100 basis points on October 2, 2025, marks the fourth reduction this year, fostering conditions for economic stimulation while managing inflation, which has dropped significantly from its previous high of 38.0% to 12.0%. This easing of inflation supports a stable currency environment.
Additionally, the EGP has strengthened to EGP 48.30 per USD, its strongest level in nearly ten months, driven by improved foreign exchange inflows and increased remittances, up nearly 70% year-on-year. These factors contribute to bolstered confidence in the EGP, enhancing its stability against the dollar.
Currently, the USD to EGP rate stands at 47.19, approximately 1.5% below its three-month average of 47.91, maintaining a relatively stable range between 46.98 and 48.60. Experts suggest that the outlook for both currencies will be heavily influenced by upcoming economic data, Fed policy direction, and ongoing developments in Egypt's monetary measures. Currency market watchers will want to keep an eye on these evolving dynamics to better navigate international transactions.
