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Egypt is developing a new currency to wean off the US dollar, US stocks rise on hopes of a less-aggressive Fed and positive earnings from the world’s biggest companies, but Tesla stock falls.
The new central bank governor of Egypt, Hassan Abdalla, announced on Sunday that the nation will develop a new currency indicator. The new currency is intended to wean people off tying the Egyptian pound to the US dollar.
The new currency indicator would be based on a basket of several currencies and possibly gold, said Abdalla, US News reported.
“It is for the sake of the idea of pegging,” said Abdalla, “and I’m not talking about the price. I’m speaking about the idea.”
“America is not my major trading partner,” Abdalla added. “I don’t know why people are always fixated on the dollar.”
For 18 months before the Ukraine crisis, The Egyptian pound had been virtually fixed at about 15.70 pounds against the US dollar. But the war triggered billions of dollars out of Egyptian treasuries in a matter of weeks, prompting the central bank to devalue the currency in March and let it gradually weaken since then.
Inflation in Egypt is currently running at 14%, and Abdalla said the central bank’s primary mission would be to get inflation under control.
With investors hopeful that the Federal Reserve will take a less aggressive stance on raising interest rates, as well as awaiting the next batch of earnings from some of the world’s biggest companies, US stocks rose on Monday. The Dow Jones industrial average was up 1.18%, the S&P 500 was up 0.98%.
According to data compiled by Bloomberg, of the almost 20 percent of the S&P 500 companies reporting so far, about 58% posted positive surprises in both revenue and earnings per share.
The Nasdaq notched up 0.42%, held back by Tesla stock dipping and a slump by some Chinese firms. NASDAQ investors are waiting to see a report on earnings this week from Alphabet Inc., Microsoft Corp., and Meta Platforms Inc.
Investors remain hopeful that the Federal Reserve will slow its pace with interest rate hikes in November after assessing weak economic data.
Tesla stock fell after it reduced prices on its Model 3 and Model Y in China by as much as 9 percent. The move reversed a trend across the industry of increases, signaling signs of softening demand in the world’s largest auto market, CNN reported. Shares of Tesla fell nearly 4% in premarket trading on the news of lower prices for its electric cars in China. Through Friday’s close, Tesla stock was down nearly 40% so far this year.
