International highlights
The Dollar weakened by US employment
The EUR/USD pair appreciated by +0.28% this week, moving from 1.1527 to 1.1559. The Dollar's weakness stems from a set of disappointing macroeconomic releases in the United States, as well as from the possibility of an agreement between the United States and Iran. Indeed, the July NFP employment report surprised negatively, at -23K versus forecasts of +80K. ADP non-farm payrolls came in at 44K, versus 95K a month earlier.
In addition, the unemployment rate recorded a slight monthly decline of -0.1%, standing at 4.1% as of end-July. In the light of these results, investors now anticipate a monetary status quo from the Fed, versus a +25 BPS hike for the ECB, at the September 2026 monetary policy meetings. 08/03 08/05 -2.546% 9.5594 08/04 08/06 08/07 -2.536% -2.622% -2.611% AUGUST
MAD evolution and foreign exchange market liquidity indicators
The Dirham supported by the basket effect despite liquidity tensions
The USD/MAD fell by -0.08% this week, to 9.32. Behind this, two opposing effects. On the one hand, a negative basket effect in favour of the Dirham, at -0.09%, following the Dollar's weakening against the Euro on the international market this week. The liquidity effect, for its part, came out positive, at +0.01%, reflecting a very slight tightening of Dirham liquidity conditions. Against this backdrop, liquidity spreads widened slightly by +1.1 BPS, to -2.54% this week.
Volatility indicators
The NFP reshuffles expectations on the Fed
The disappointing NFP report significantly impacted market expectations regarding the Fed's trajectory, with participants now betting on a monetary status quo, versus a +25 BPS hike a week earlier. In parallel, the geopolitical lull once again pushed Brent prices lower, to $84/bbl at the end of the week. Uncertainty over the Fed's next decisions and developments in the US-Iran conflict should fuel short-term volatility. We therefore recommend that operators hedge their transactions over 1-to-3-month.
EUR/USD outlook – BLOOMBERG
Broker forecasts were revised over the long term this week. The pair is expected to trade around 1.15 in Q3-26, before reaching 1.16 in Q4-26, a level at which it should stabilise until Q1-27. In Q2-27, the target remains set at 1.17. Over full-year 2027, the pair is expected to stand around 1.18, versus 1.19 a week earlier. Over the longer term, it is now expected at 1.17 for 2028 and 1.18 for 2029, versus 1.18 and 1.17 respectively last week.
In the United States, recently released data point to a weakened labour market. On the one hand, ADP non-farm payrolls came in at 44K in July, versus 95K a month earlier. Initial jobless claims rose by +1K over the week, standing at 199K. The July NFP non-farm employment report came in at -23K, versus forecasts of +80K. In addition, the unemployment rate declined slightly by -0.1% over the month, standing at 4.1%. On the basis of these elements, markets have updated their expectations regarding the Fed's future direction and are now betting on a monetary status quo at the September FOMC, according to the CME FedWatch tool.
In the Eurozone, the July HCOB services PMI came in at 51.7, versus a consensus of 51.6. Along the same lines, the HCOB manufacturing PMI stood at 51.9, versus 52 previously. In this environment, markets continue to forecast a +25 BPS interest rate hike by the ECB in September, according to the ECB Watch tool.
Maintaining our forecasts at the 1-month 2-month and 3-month horizons
Taking into consideration EUR/USD forecasts and liquidity conditions on the foreign exchange market, we have maintained our USD/MAD projections at the 1-month, 2-month and 3-month horizons.
Broker expectations for EUR/USD point to an appreciation of the Dollar against the Euro over the 1 to 3-month horizons, relative to spot levels.
Dirham liquidity spreads are expected to ease at the 1-month horizon, and stabilize at the 2-month and 3-month horizons, relative to current levels.
Under these conditions, the USD/MAD target levels stand at 9.30, 9.30 and 9.30 at the 1-month, 2-month and 3-month horizons respectively, against a spot level of 9.32.
The EUR/MAD target levels stand at 10.59, 10.59 and 10.59 at the 1-month, 2-month and 3-month horizons respectively, against a spot level of 10.74.
