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Wednesday, 25 May 2022

Commodity prices are bolstering EM currencies against a surging greenback

EM currencies are standing strong in the face of a strengthening greenback: Emerging-market currencies have outperformed those in developed economies since January despite a strengthening USD, which has hit its highest level in years on the back of concerns over inflation and global growth, the Wall Street Journal writes. Currencies of commodity producers such as the BRL, CLP and ZAR have all seen strong gains this year, as investors try to ride the wave of surging commodity prices. The BRL has risen 13% against the USD thanks to its position in the coffee and soybean export markets, while the CLP has gained due to the country’s dominant status as a copper producer.

The RUB is hot: The RUB defied western sanctions to become the world’s best performing currency on Tuesday, after strengthening 30% against the USD to 56.80 — a level not seen since 2018, Reuters reports. The currency has benefited from exporters converting FX to tax payments and new rules forcing European importers to purchase oil and gas in RUB.

The TRY is not: The TRY crashed to a five-month low yesterday as dwindling reserves and the central bank’s refusal to raise interest rates to combat decades-high inflation heaped more pressure on the currency, Bloomberg writes.

MEANWHILE- The ECB thinks crypto could pose “systemic” threat to financial system: The European Central Bank has warned that the financial sector’s increasing involvement in crypto assets could pose a “systemic risk” to the global financial system, and called for tougher supervision of the unregulated market. (ECB)

Also worth noting this morning:

  • Marafiq taps HSBC, Riyad Capital for IPO: Saudi utility Marafiq has tapped HSBC and Riyad Capital to manage its upcoming USD 1.2 bn IPO. (Bloomberg)
  • Look out for a blockbuster tech acquisition: US-based semiconductor and software firm Broadcom could acquire cloud computing leader VMware for USD 60 bn, in what would be one of the biggest acquisitions of the year so far, according to people close to the talks. (Wall Street Journal)
  • JPMorgan’s UK Chase launch isn’t going to plan: JPMorgan’s retail bank, Chase, will lose more than USD 1 bn on its new international operations, which launched in the UK last year as a digital bank. The bank expects to break even on the bank by 2027 or 2028 and “generate significant income thereafter.” (FT)




-1.0% (YTD: -12.8%)



Buy 18.46

Sell 18.55



Buy 18.49

Sell 18.55


Interest rates CBE

11.25% deposit

12.25% lending




+0.5% (YTD: +9.0%)




-2.5% (YTD: +11.6%)




-1.5% (YTD: +2.0%)


S&P 500


-0.8% (YTD: -17.3%)


FTSE 100


-0.4% (YTD: +1.4%)


Euro Stoxx 50


-1.6% (YTD: -15.1%)


Brent crude

USD 113.56



Natural gas (Nymex)

USD 8.85




USD 1,870.50




USD 29,591

+1.3% (YTD: -36.2%)


The EGX30 fell 1.0% at yesterday’s close on turnover of EGP 609 mn (28.1% below the 90-day average). Foreign investors were net sellers. The index is down 12.8% YTD.

In the green: Rameda (+3.7%) and Oriental Weaver (+0.3%).

In the red: Ibnsina Pharma (-7.0%), Palm Hills Development (-5.9%) and Orascom Construction (-5.1%).

It’s another mixed open in Asia this morning following yesterday’s sell-off on Wall Street ⁠— and it’s looking like much the same in Europe and the US, according to stock futures.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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