EUR/USD under pressure on the currency market
The EUR/USD pair depreciated -0.25% to 1.1365, after reaching a peak of over 1.15 earlier this week, a 3-year high.
The dollar's appreciation this week was driven by two factors. First, Trump's statement that he had no intention of firing Jerome Powell, which reassured financial markets about the Fed's independence. Second, the Secretary of the Treasury of the United States stated that tariffs between China and the United States were not sustainable in the long term and that negotiations are ongoing between the two countries. These statements revived market hopes for a de-escalation of trade tensions and an agreement to normalize tariffs.
Currency market: the Dirham holds firm against the dollar
The USD/MAD pair virtually stabilized this week, evolving by -0.06% from 9.28 to 9.27.
This evolution is explained by two opposing effects. On the one hand, there is a positive basket effect of +0.10% related to the appreciation of the Dollar this week. On the other hand, the market effect stands at -0.10% following the continued easing of liquidity conditions for the Dirham on the Moroccan FX interbank market. The Dirham's liquidity spreads thus continue to improve, by -10 BPS to -3.92%, thanks to stronger export flows than those of imports.
Trade tensions and uncertainties
Uncertainties related to trade tensions between the United States and China are rekindling concerns about global economic growth and fueling international currency volatility.
As such, significant currency volatility is expected. We recommend traders to hedge their trades over time horizons of 1 to 3 months.
