Global Markets Daily: Egyptian Pound (EGP) — More Upside, But More Gradually from Here

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Global Markets Daily: Egyptian Pound (EGP) — More Upside, But More Gradually from Here

Economics Research

17 June 2026 | 6:49PM BST

Global Markets Daily: Egyptian Pound (EGP) — More Upside, But More

Gradually from Here

n We stepped back into a long Egyptian Pound (EGP) view after the ceasefire Victor Engel

+44(20)7051-3862 |

announcement in April given limited retracement and still solid fundamentals for victor.engel@gs.com

Goldman Sachs International

a carry trade. With an Iran-US deal now looking more imminent, EGP has had

among the biggest moves and has appreciated by more than 3% in two sessions

as a result. In this Global Markets Daily, we reiterate this constructive view and

introduce our USD/EGP forecasts, reflecting a more gradual appreciation

trajectory from here.

n Several factors justify further appreciation from here in our view. First, even with

the appreciation of the past week, EGP has only partly retraced its weakening

since the war began, which was one of the largest on a volatility-adjusted basis in

the EM and Frontier FX space. Second, despite the recent strengthening, EGP is

still significantly undervalued according to our GSDEER and REER metrics. And

third, we think the realisation of the ‘relief’ scenario coinciding with a renewed

global interest in EM carry justifies further increases in foreign positioning in local

markets, supporting spot returns.

n The major risks to our view stem from a reversal of the current ‘relief’ pricing and

renewed focus on deep-tail growth and geopolitical risks. But we think the

likelihood of a more front-footed rate hiking response to higher inflation and

resilient external reserve fundamentals through the shock so far can limit spot

volatility in such a scenario.