The Egyptian pound may find support at around 5.8 to the dollar after falling to a five-year low earlier this week, traders said. But an escalation of the debt crisis in the European Union, Egypt’s biggest trading partner, could push the pound to breach that support level early next year.
"Psychologically, I think it will help," one Cairo-based trader said. "If there is some pressure on the Egyptian pound, I would say it could break it in the first quarter of 2011."
Another suggests the central bank might intervene if the pound weakens to that level. The pound was trading relatively steady at around 5.786 to the dollar, largely shrugging off parliamentary elections which gave the ruling party an expected victory this week.
