Small Revaluation Or Seismic Shift?

October 2007 | Currency Forecast

We wrote in our last currency forecast that 'the end of official intervention, which could take place towards the end of 2007, would lead to a more rapid appreciation', highlighting our long-held target of EGP5.5/US$. This scenario began to play out as of late August, and the target is now in sight. While we believe that the pound would break through this level if left to trade without official restriction, there is a risk that such a rapid appreciation would be too politically painful, and that the bank will renew its policy of buying dollars. For this reason we are

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