International highlights
Euro supported by resilient macroeconomic indicators
The EUR/USD pair appreciated by +0.36% over the week to reach 1.1765, supported by favorable macroeconomic data in the Eurozone. Inflation came in at 1.3%, slightly above the 1.2% target, while industrial production rebounded to +0.4% from -0.8% previously.
In the United States, March PPI was limited to +0.1%, below the +0.4% consensus. At the same time, the geopolitical environment showed signs of easing following the resumption of talks related to the Middle East conflict.
Against this backdrop, market expectations are increasingly pointing to a monetary policy pause by both the Federal Reserve and the ECB at their upcoming April policy meetings.
MAD evolution and foreign exchange market liquidity indicators
MAD strengthens significantly against the US Dollar
The USD/MAD pair depreciated by -0.79% over the week, moving from 9.29 to 9.22, reflecting favorable dynamics for the Moroccan dirham. This move was driven by a dual positive effect for the MAD: on the one hand, a basket effect of -0.56%, linked to downward pressure on the US dollar in international markets; on the other hand, a liquidity effect of -0.23%, reflecting improved liquidity conditions in the FX interbank market. In this context, liquidity spreads narrowed by -22.8 BPS to -2.19% over the week.
Brent declines amid easing tensions in the Strait of Hormuz
The partial reopening of the Strait of Hormuz at the end of the week led to a noticeable decline in oil prices, with Brent falling to $90.4/bbl, thereby easing short-term inflationary pressures and reducing the need for further monetary tightening by central banks. In this context, investor attention is now shifting toward the second round of negotiations between the United States and Iran. In this volatile environment, we recommend that market participants maintain short-term hedging strategies.
EUR/USD OUTLOOK – BLOOMBERG
Broker forecasts for the EUR/USD pair were revised upward in the near term this week, with the pair now expected at 1.17 in Q2-26, up from 1.16 previously, before reaching 1.18 in Q3-26 (vs. 1.17 a week earlier). For Q4-26, the target remains unchanged at 1.18, followed by 1.19 in Q1-27. In 2027, the pair is now projected at 1.19, compared to 1.20 previously, while longer-term forecasts remain unchanged at 1.19 for 2028 and 1.21 for 2029.
On the macroeconomic front, recent US data point to a slight slowdown in economic momentum amid ongoing tensions in the Middle East. Import prices came in at 0.8%, below the 2.3% target trajectory, while industrial production contracted by -0.5% following a +0.7% increase previously. This comes despite continued strength in the labor market, as reflected in a decline in initial jobless claims by -11K to 207K. Against this backdrop, and in an environment still shaped by ongoing US-Iran negotiations, market expectations continue to favour a monetary policy pause by the Federal Reserve at the upcoming April FOMC meeting, according to the FedWatch tool.
In the Eurozone, March CPI came in at 1.3%, above the 1.2% consensus, reflecting inflationary pressures driven by rising commodity prices in a tense geopolitical environment. Under these conditions, markets also forecast a monetary policy pause by the ECB at its April meeting, 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 9.34, 9.34, and 9.31 over the 1-,2-,and 3-month horizons, respectively, compared to a current spot level of 9.22.
Similarly, EUR/MAD targets are projected at 10.91, 10.91, and 10.88 over the 1-, 2-, and 3-month horizons, respectively, compared to a current spot level of 10.88.
