USD/EGP Outlook:
Bearish, as the USD is trading below its recent average and near its 90-day lows.
Key drivers:
• Rate gap: The US Federal Reserve has held interest rates steady, limiting USD's attractiveness compared to the Central Bank of Egypt's flexible monetary policy.
• Risk/commodities: Global currency trends continue to impact the USD, with de-dollarization efforts by BRICS nations reducing its prominence in international trade.
• One macro factor: Improved economic conditions in Egypt, including robust foreign currency inflows and strong tourism revenues, have boosted the Egyptian pound.
Range:
USD/EGP is likely to hold within its recent stable range as it remains pressured near recent lows.
What could change it:
• Upside risk: A surprising increase in US job market data could boost USD demand.
• Downside risk: Continued geopolitical tensions affecting US trade policies may weaken the dollar further.
