International highlights
The Dollar supported by the Fed's new dot plot
The EUR/USD pair depreciated by -0.84% this week, down from 1.1568 to 1.1471. The Fed's decision to hold rates steady, coupled with a more hawkish June Dot Plot, supported the Dollar over the period. The median Fed Funds rate projection moved from 3.4% in March to 3.8% in June, for end-2026. On the macroeconomic front, weekly jobless claims fell by -4K to 226K. On the Eurozone side, the ZEW Economic Sentiment Index rose from -9.1 in May to +9.5 in June, reflecting hopes of a definitive resolution to the Middle East conflict, which should gradually alleviate pressure on energy prices and inflation across the region.
MAD evolution and foreign exchange market liquidity indicators
Basket effect supporting the Dollar this week
The USD/MAD pair appreciated, for the second consecutive week, by +0.57%, reaching 9.32, This move was driven primarily by a basket effect favouring the Dollar, which came in at +0.58%, linked to the notable appreciation of the Dollar on the international market. The liquidity effect, for its part, came in at -0.01%, reflecting a slight easing of Dirham liquidity conditions on Morocco's interbank foreign exchange market. Liquidity spreads consequently eased by -1.3 BPS, settling at -2.9% at the end of the week.
Volatility indicators
Crude pullback and Dollar strengthening this week
Brent crude futures prices continued to decline, reaching $80/bbl this week — their lowest level since March 2026. This correction comes amid growing hopes of a definitive resolution to the Middle East conflict, following the signing of a preliminary peace agreement. Meanwhile, the DXY index surged to a one-year high of 100.9. Volatility remains elevated across foreign exchange markets, leading us to recommend that market participants favour short-term hedging strategies.
EUR/USD outlook – BLOOMBERG
Broker forecasts for EUR/USD were revised upward on a long-term basis this week. The pair is expected to trade at 1.17 in Q3 2026, before reaching 1.18 in Q4 2026. For Q1 2027, the pair is expected at 1.18, then at 1.19 in Q2 2027. For full-year 2027, the pair is projected to reach 1.20. Over the longer term, the target now stands at 1.21 for 2028, revised up from 1.20 as forecasted a week earlier, and at 1.22 for 2029.
The Fed decided to hold rates steady at its June 2026 Federal Open Market Committee (FOMC) meeting, keeping its key interest rates within the target range of [3.50% - 3.75%]. This decision was supported by economic activity expanding at a solid pace, despite persistent geopolitical uncertainties. On the macroeconomic front, released indicators showed the Philadelphia Fed Manufacturing Index for June coming in at 10.3, versus -0.4 recorded the previous month, signalling a marked improvement in general business activity conditions. In light of these developments, the Fed's Dot Plot now reveals a median Fed Funds rate target of 3.8% by end-2026, compared to 3.4% anticipated in March, representing an upward revision of +40 BPS.
On the Eurozone side, the May CPI printed in line with expectations at 0.1%. The ZEW Economic Sentiment Index posted a sharp rebound to +9.5 in June, from -9.1 the previous month, signalling an improvement in investor confidence underpinned by the signing of the preliminary peace agreement between the United States and Iran. In this environment, markets continue to price in a further +25 BPS rate hike by the ECB in September 2026.
Downward revision of our 1-month forecast
In light of EUR/USD forecasts and liquidity conditions on the foreign exchange market, we have revised our USD/MAD projection downward at the 1-month horizon.
Broker expectations for EUR/USD point to an appreciation of the Euro against the Dollar over the 1 to 3-month horizons, relative to current spot levels.
Dirham liquidity spreads are expected to tighten at the 1-month horizon, before stabilising at the 2-month and 3-month horizons, relative to current levels, ahead of the onset of the summer season.
Under these conditions, the USD/MAD target levels stand at 9.18, 9.18 and 9.18 at the 1-month, 2-month and 3-month horizons respectively, against a current spot level of 9.32.
The EUR/MAD target levels stand at 10.65, 10.65 and 10.65 at the 1-month, 2-month and 3-month horizons respectively, against a current spot level of 10.68.
