International highlights
US Dollar under pressure amid an inflationary backdrop
The EUR/USD pair appreciated by +1.51% over the week, reaching 1.1589, in an environment characterized by broadly cautious monetary policy decisions. At their March 2026 meetings, both the FED and the ECB left their key policy rates unchanged, adopting a wait-and-see stance amid uncertain economic prospects. Against this backdrop, market expectations evolved in a differentiated manner. In the Eurozone, strengthening inflation expectations—driven notably by rising energy prices linked to escalating geopolitical tensions in the Middle East—provided support to the euro. Conversely, the US Dollar saw its safe-haven appeal gradually erode, despite expectations of a potentially more restrictive monetary stance from the Fed, in an environment where downside risks to US growth remain elevated.
MAD evolution and foreign exchange market liquidity indicators
Dirham supported by a dual basket and liquidity effect
The USD/MAD pair depreciated by -0.40% over the week, moving from 9.43 to 9.39. This evolution reflects two factors supportive of the Dirham. On the one hand, the basket effect stood at -0.06%, driven by the depreciation of the US Dollar at the international level. On the other hand, the liquidity effect came in at -0.34%, reflecting an easing of liquidity conditions in the interbank FX market. In this context, liquidity spreads narrowed by -33.2 BPS to settle at -2.06% this week.
Volatility indicators
Energy tensions and rising inflationary pressures
The surge in oil prices, driven by strikes on energy infrastructure in the Middle East and escalating tensions in the Strait of Hormuz, has reinforced market expectations of a potential shift in Central Banks’ monetary policy stance, amid a renewed rise in inflationary pressures. In this environment, we recommend that market participants hedge their exposures over short-term horizons.
EUR/USD outlook– BLOOMBERG
Broker forecasts for EUR/USD were maintained this week. The pair is expected to trade around 1.18 in Q2-26, before reaching 1.19 in Q3-26. For Q4-26, the target remains unchanged at 1.20, a level at which the pair is expected to stabilize through Q1-27. For 2027, EUR/USD is projected at 1.21. Over the longer term, forecasts stand at 1.21 in 2028 and 1.23 in 2029.
In the United States, the release of macroeconomic data provided reassurance regarding the resilience of economic activity. Initial jobless claims declined by 8K to 205K, down from 213K previously, confirming the strength of the labor market. In this context, the Federal Reserve kept its policy rates unchanged within the [3.50%–3.75%] range at the March 2026 FOMC meeting. In addition, the dot plot released following the meeting pointed to a Fed Funds rate of 3.4% by year-end.
In the Eurozone, macroeconomic indicators were more mixed. The March ZEW economic sentiment index came in sharply lower at -8.5, compared with a forecast of 39.4. Meanwhile, February CPI stood at 0.6%, slightly below the consensus of 0.7%. Against a backdrop of rising inflation concerns linked to geopolitical tensions, investors are now pricing in three ECB rate hikes in 2026, each of +25 BPS, expected in April, June, and October, according to the ECB Watch tool. It is also worth noting that the ECB kept its policy rates unchanged at its March 2026 meeting.
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:
- 9,32 at 1 month
- 9,32 at 2 months
- 9,29 at 3 months
compared to a spot rate of 9.39
Similarly, EUR/MAD targets are projected at:
- 10,93 at 1 month
- 10,93 at 2 months
- 10,90 at 3 months
against a spot level of 10.78.
