International highlights
The Dollar Supported by favorable macroeconomic data
The EUR/USD pair declined slightly by -0.54% over the week, settling at 1.1509. In an uncertain environment that remains tense in the Middle East, this development is primarily driven by the release of stronger-than-expected U.S. macroeconomic data. On the one hand, the February import price index came in at 1.3%, above expectations of 0.6%. Meanwhile, the export price index rose to 1.5%, compared to the consensus of 0.5%. In addition, initial jobless claims increased marginally by 5K to reach 210K, still below the expected level of 211K. In this context, markets continue to price in a more restrictive Fed stance over the course of 2026.
MAD evolution and foreign exchange market liquidity indicators
Dual basket and liquidity effects supporting the Dirham
The USD/MAD pair depreciated by -0.62% over the week, settling at 9.33. This move reflects a dual effect, supportive of the Dirham. On the one hand, the basket effect stood at -0.26%, in line with the Dollar’s decline. On the other hand, the liquidity effect came in at -0.36%, reflecting an easing in liquidity conditions in the interbank FX market. Under these conditions, liquidity spreads narrowed by -35.4 BPS to reach -2.41% over the week.
Volatility indicators
Energy tensions and revised rate expectations
The almost-closure of the Strait of Hormuz, combined with the lack of tangible signs of de-escalation in the conflict between the United States and Iran, continue to weigh on energy markets, fueling concerns over a renewed rise in inflationary pressures. In this context, central banks are postponing rate cuts decisions for 2026, both on the Fed and ECB sides. In this environment, we recommend that market participants hedge their positions over short-term horizons.
EUR/USD outlook– BLOOMBERG
Broker forecasts for the EUR/USD pair have been broadly revised this week. The pair is expected to hover around 1.18 in Q2-26, before reaching 1.19 in Q3-26. In Q4-26, the target is now seen at 1.19, compared to 1.20 a week earlier. In Q1-27, the pair is expected to continue its upward trajectory toward 1.20, before reaching 1.21 in 2027. Over the longer term, projections stand at 1.20 in 2028 (vs. 1.21 previously) and 1.23 in 2029.
In the United States, inflation expectations have been revised upward. They are now expected to reach 3.8% in 2026E, compared to 3.4% previously, while five-year expectations remain unchanged at 3.2%. Moreover, recent macroeconomic releases confirm the resilience of the U.S. economy. The February import price index came in at 1.3%, compared to 0.7% previously, while the export price index stood at 1.5%, above the 0.6% consensus. For reference, the dot plot released following the March FOMC meeting points to a Fed Funds rate of 3.4% by end of 2026.
In the euro area, the March HCOB manufacturing PMI moved into expansion territory at 51.4, compared to a consensus of 49.4, reflecting stronger momentum in industrial activity. However, in an environment marked by geopolitical tensions in the Middle East and their inflationary implications, markets continue to anticipate three ECB rate hikes by end of 2026, each of +25 BPS, according to the ECB Watch tool
Maintaining our forecasts over the 1- 2- and 3-month horizons
Considering the EUR/USD parity forecasts and the liquidity conditions in the foreign exchange market, we have maintained our forecasts for the USD/MAD pair over the 1-month, 2-month, and 3-month horizons.
Broker expectations for EUR/USD point to a slight appreciation of the US Dollar against the Euro over the 3-month horizon, relative to current spot levels.
Meanwhile, Dirham liquidity spreads are expected to gradually tighten over the 1- and 2-month horizons compared to current levels, before easing at the 3-month horizon.
Under these conditions, our target levels for USD/MAD stand at:
- 9,33 at 1 month
- 9,33 at 2 months
- 9,30 at 3 months
compared to a spot rate of 9.33
Les niveaux cibles de la parité EUR/MAD ressortent à :
- 10,92 at 1 month
- 10,92 at 2 months
- 10,88 at 3 months
against a spot level of 10.75.
