USD/EGP Outlook:
The USD/EGP rate is slightly positive, but likely to move sideways as it is just above its recent average and trading within a stable range. The prevailing economic dynamics do not provide a strong driver for significant changes.
Key drivers:
• Rate gap: The gap between US and Egyptian interest rates continues to favor the USD, supporting its relative strength.
• Risk/commodities: A rise in safe-haven demand due to geopolitical tensions has bolstered the USD, impacting the EGP negatively as it puts pressure on local currency stability.
• Macro factor: Egypt's recent cabinet reshuffle may improve economic conditions, potentially stabilizing the EGP, yet its effects are yet to fully materialize.
Range:
Expect the USD/EGP to hold within its recent range of around 46.60 to 47.80 as conditions remain stable.
What could change it:
• Upside risk: A strong US GDP print could drive the USD higher against the EGP.
• Downside risk: If Egypt’s economic reforms significantly boost confidence, the EGP might strengthen against the USD.
