The Egyptian pound is facing renewed market pressure as 12-month dollar futures climbed to nearly 64 pounds on Tuesday, up more than two pounds from levels recorded a day earlier.
The move signals growing expectations among investors that the local currency will remain under strain, as forward contracts typically reflect hedging against risk and market sentiment about future exchange rates.
Rising forward prices suggest markets anticipate continued pressure on the pound, driven by a mix of domestic factors, including inflation and a widening trade deficit, as well as external shocks such as higher energy prices and escalating geopolitical tensions linked to the US–Israeli war on Iran.
In the banking sector, the dollar held steady on Tuesday at 54.6 pounds at the National Bank of Egypt, matching Monday’s level, which ranks among the highest in the currency’s history.
The sustained pressure comes as the US–Israeli war on Iran expands and as Yemen’s Houthi group has threatened maritime traffic in the Bab Al-Mandeb strait, a critical artery for global trade.
On Saturday, the Houthis launched missiles toward Israel while warning of potential closure of the Bab Al-Mandeb strait and disruption to shipping routes, echoing tensions already affecting the Strait of Hormuz and adding further strain to global trade flows.
Suez Canal revenues fell sharply during Israel’s war on Gaza, declining from $8.7 billion in 2022–2023 to $3.6 billion in 2024–2025. Just as the canal began showing signs of recovery after the war, Israel’s attack on Iran has again disrupted maritime traffic.
Egypt grappled with a shortage of dollar liquidity in 2023 and 2024 after roughly $20 billion in foreign investments exited the local debt market in 2022. Investment flows only began to recover following a sharp devaluation of the pound in March 2024.
