The EGX and pound falls again amid additional US tariffs
On Wednesday, the Egyptian pound (LE) faced another decline following the latest US tariff increases. At one point, the currency briefly reached 51.72 against the US dollar before settling at an average of 51.67 by the end of the trading day, contributing to its ongoing volatility.
The drop in the pound was mirrored by a steep decline in the Egyptian Exchange (EGX), where the main indices fell by between 1.86% and 3.65%.
Despite a slight recovery in the stock market on Tuesday, the EGX once again ended in negative territory, reflecting the broader market’s reaction to the rising US tariffs and the weakening currency.
The pressure from these tariffs began to affect the LE and EGX on Sunday, as global markets reacted to the US administration's economic policies.
On Monday, the Egyptian pound hit its lowest rate since last year’s devaluation, reaching 51.4 against the dollar. While the LE slipped further to a record low of 51.53, it slightly recovered to 51.27 by 3 PM Cairo time on Tuesday, offering a brief signal of stabilization.
However, the broader trend remains uncertain, with the market continuing to show mixed performances.
On Sunday, the EGX30 index dropped by 3.3 percent, reflecting the ripple effect of the US tariff measures. The official exchange rate of the US dollar at the Central Bank of Egypt (CBE) also saw a notable increase on Sunday, rising by LE 0.53, closing at 51.0564 for buying and 51.1944 for selling—up from the previous week’s closing figures of 50.5296 and 50.6669.
Oil prices took a hit, falling to their lowest levels in four years on Wednesday, exacerbated by China’s retaliatory tariffs against US goods.
China announced that it would impose an 84 percent tariff on US imports starting Thursday, a significant increase from the previously planned 34 percent, following President Trump’s imposition of a 104 percent tariff on Chinese goods.
Meanwhile, the European Union (EU) has also escalated tensions with the US, approving counter tariffs that will go into effect on April 15.
The EU’s response comes after Trump’s implementation of 25 percent duties on metals, which the EU considers unjustified and harmful to both sides of the Atlantic. The European Commission stated that these countermeasures could be suspended if the US agrees to a balanced and negotiated outcome.
EU officials, including European Commission President Ursula von der Leyen, have warned that the EU is prepared to take further action if necessary, though they continue to push for negotiations to address trade imbalances with the US.