Executive Summary
The USD/MAD pair depreciated this week by -0.62% from 9.89 to 9.83.
At the origin of this development, a double "market - basket" effect in favor of the Dirham. In more detail, the basket effect stands at -0.44% and the market effect stands at -0.18% due to the significant easing of liquidity conditions on the foreign exchange market.
Liquidity spreads have eased by -17.9 BPS to -0.60%.
The Dirham is supported by workers’ remittances as well as the good performance of tourist revenues during this summer period.
The latest US inflation report argues in favour of a faster-than-expected Fed rate cut. To this end, the divergence in policies between the Fed and the ECB could narrow, thus favouring the dollar. However, US fundamentals deemed "worrying" are weighing on the dollar on the short run.
Given this mixed context, we recommend that importers raise their hedging level in order to limit the impact of expected currency volatility on their margins.
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