The Egyptian pound maintained its stability against the US dollar during on Friday, coinciding with the weekend break for the nation’s banking sector. According to the latest figures from the Central Bank of Egypt, the dollar remains anchored at LE46.86 for purchase and LE46.99 for sale.
However, the US dollar surged to a two-week high on the global stage. This strength is largely attributed to a “flight to safety” as international investors retreat from riskier assets following a massive sell-off in global equities, cryptocurrencies, and precious metals.
Global market turmoil
The primary catalyst for this global shift is a mounting “tech rout.” Investors are increasingly nervous about the sheer scale of capital expenditure on Artificial Intelligence (AI), with major firms projected to spend over $600 billion this year alone. Fears that these massive investments may not yield immediate productivity gains have triggered the worst weekly sell-off for global shares since November.
Safe-haven dynamics
City Index strategist Fiona Cincotta noted that with the Japanese yen and Swiss franc underperforming due to domestic political jitters, the US dollar has become the “best bet” for those seeking a haven. The Dollar Index (DXY) rose 0.7% this week, bolstered further by the recent nomination of Kevin Warsh as the next Federal Reserve Chair, whom markets view as a hawk on interest rate cuts.
As the US prepares for next week’s delayed January payrolls report, all eyes remain on whether a cooling labour market will eventually force the Fed to resume rate cuts, potentially easing the upward pressure on the greenback.
