International highlights
USD retreats following mixed U.S. economic data
The EUR/USD pair appreciated by +0.45% over the week to reach 1.1868. The U.S. Dollar remained under pressure amid heightened uncertainty surrounding the future trajectory of Federal Reserve monetary policy, following the release of softer-than-expected macroeconomic data and easing inflation dynamics. Initial jobless claims came in at 227K, above the 222K consensus forecast, while January CPI came in at +0.2%, slightly below the +0.3% market consensus. These developments reinforced markets’ expectations of a more pronounced and earlier monetary easing cycle by the Fed during 2026.
MAD evolution and foreign exchange market liquidity indicators
Dual supportive effect drives MAD appreciation this week
The USD/MAD pair depreciated by -0.41% over the week, moving from 9.18 to 9.14. The decline reflects a combined supportive effect stemming from both the basket and the liquidity components. On the one hand, the basket effect contributed -0.36%, inline with the depreciation of the U.S. Dollar in international markets this week. On the other hand, the liquidity effect stood at -0.05%, reflecting an easing of liquidity conditions in the interbank FX market. Against this backdrop, liquidity spreads remained in negative territory, narrowing by -5.3 BPS to -2.65% this week.
Volatility indicators
Fed: Uncertainty and heightened volatility
In the United States, both economic and political situations continue to materially shape markets’ expectations regarding the future direction of the Federal Reserve’s monetary policy. In this context, higher volatility is expected in the foreign exchange market. We recommend that operators hedge their transactions over 1 to 3 months.
EUR/USD outlook– BLOOMBERG
Brokers’ EUR/USD forecasts were broadly revised this week. The pair is now expected to trade around 1.19 by Q1-26, up from 1.18 a week earlier, and to remain close to that level in Q2-26. In Q3-26 and Q4-26, EUR/USD should continue its upward trend to 1.20, before reaching 1.21 in 2027, compared with 1.22 previously expected. For 2028–2029, the target is now set at 1.21 for 2028 (vs. 1.20 a week ago) and 1.23 for 2029.
In the United States, recent releases reinforced the case for a more accommodative Fed bias. Initial jobless claims came in at 227K, above the 222K consensus, while January CPI signaled moderation, i.e. +0.2%. Against this backdrop, investors stepped up expectations of monetary easing in 2026. Futures markets now price in two -25 BPS rate cuts in 2026, with the first expected in June and the second at the September FOMC, according to the CME FedWatch tool.
In the Eurozone, Q4-25 GDP printed in line with expectations at 1.3%, supporting the resilience of economic activity. With inflation dynamics remaining broadly favorable, the ECB opted to keep its policy rate unchanged at 2.0% at its February 2026 meeting. Markets therefore continue to anticipate an ECB policy hold throughout 2026, according to the ECB Watch tool.
Upward revision of our forecasts at the our 2- and 3- months horizons
Considering the EUR/USD parity forecasts and liquidity conditions in the foreign exchange market, we have revised our USD/MAD projections upward over the 2- and 3-month horizons.
The brokers’ forecasts of the EUR/USD parity point towards a slight appreciation of the euro against the U.S. dollar over a 3-month horizon, compared to spot levels.
Meanwhile, the Dirham liquidity spreads are expected to gradually tighten over the 1-, 2- and 3-month horizons compared with spot levels.
Under these assumptions, USD/MAD target levels stand at:
- 9,25 at 1 month
- 9,26 at 2 months
- 9,31 at 3 months
compared to a spot rate of 9.14
EUR/MAD target levels stand at:
- 10,80 at 1 month
- 10,82 at 2 months
- 10,88 at 3 months
against a spot level of 10.85.
