International highlights
The Dollar supported by renewed geopolitical tensions
The EUR/USD pair depreciated by -0.18% this week, reaching 1.1416. This move was primarily driven by renewed geopolitical tensions between the United States and Iran, which supported demand for the greenback. On the macroeconomic front, U.S. weekly jobless claims fell by -2K to 215K. Additionally, the Atlanta Fed GDP estimate came in at 1.4%, above the forecast of 1.2%. In light of these developments, markets continue to price in a +25 BPS Fed rate hike at the September Federal Open Market Committee (FOMC) meeting.
MAD evolution and foreign exchange market liquidity indicators
Liquidity effect favouring the Dirham this week
The USD/MAD pair depreciated by -0.18% this week, moving from 9.35 to 9.34. This move was driven primarily by a liquidity effect favouring the Dirham. The liquidity effect came in at -0.26%, reflecting an easing of liquidity conditions on Morocco's interbank foreign exchange market. The basket effect, for its part, stood at +0.08%, in line with the appreciation of the Dollar on the international market this week. Under these conditions, liquidity spreads eased by -25.7 BPS, settling at -2.8% at the end of the week.
Volatility indicators
Brent prices rise on renewed Middle East tensions
Brent crude futures prices rose by 5.4% on Friday, reaching $76/bbl — their highest level of the week. The resurgence of Middle East tensions drove demand for safe-haven assets, exerting upward pressure on energy prices. In this environment of elevated volatility, we recommend that market participants favour short-term hedging strategies.
EUR/USD outlook – BLOOMBERG
Broker forecasts for EUR/USD were slightly revised downward this week. The pair is expected to trade around 1.15 in Q3 2026, versus 1.16 the previous week. For Q4 2026, the pair is still expected at 1.16, before reaching 1.17 in Q1 2027. For Q2 2027, the target remains unchanged at 1.17. For full-year 2027, the pair is projected to hover around 1.18. Over the longer term, the pair is now expected at 1.18 for 2028, versus 1.19 last week. For 2029, the target remains stable at 1.19.
In the United States, the week was marked by a series of macroeconomic data releases. The ISM Non-Manufacturing Prices Index for June came in at 67.7, above the consensus of 67.5. Meanwhile, continuing jobless claims printed at 1,814K, up 8,000 from the previous week. In this context, markets continue to price in a hawkish bias from the Fed by year-end, with a +25 BPS Fed Funds rate hike expected at the September FOMC meeting, according to the CME FedWatch tool.
On the Eurozone side, May retail sales came in line with expectations at -0.2%, reflecting a slight improvement in consumer conditions within the bloc. In this environment, investors are pricing in a further +25 BPS ECB rate hike in September 2026.
Maintaining our forecasts at the 1-month 2-month and 3-month horizons
In light of 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 Euro against the Dollar over the 1 to 3-month horizons, relative to current 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 9.28, 9.28 and 9.28 at the 1-month, 2-month and 3-month horizons respectively, against a current spot level of 9.34.
The EUR/MAD target levels stand at 10.60, 10.60 and 10.60 at the 1-month, 2-month and 3-month horizons respectively, against a current spot level of 10.68.
