USD/MAD: What to expect in the short term

International highlights

The Dollar supported by a restrictive Fed and elevated yields

The EUR/USD pair depreciated for the third consecutive week, by -0.49%, to 1.12. Fed minutes perceived as restrictive, combined with still-elevated US yields (10-year Treasury at 5.24% at the end of the week), supported the Dollar this week. On the macroeconomic front, the Eurozone services PMI came out stable in September, at 53, confirming steady expansion in the services sector. In addition, weekly jobless claims in the United States fell by -2K, to 197K. In this environment, markets continue to anticipate a monetary status quo from both the Fed and the ECB at the October monetary policy meetings.

MAD evolution and foreign exchange market liquidity indicators

Liquidity supporting the Dirham this week

The USD/MAD remained near-stable after a sharp appreciation of +2.69% last week. The USD/MAD pair thus comes out at 9.85 this week. A liquidity effect favourable to the Dirham was behind this move, fully offsetting the impact of the Dollar’s rise internationally. Indeed, the liquidity effect came out at -0.23%, reflecting a slight easing of liquidity conditions on the Moroccan interbank foreign exchange market, while the basket effect stood at +0.18% this week. In this environment, liquidity spreads eased by -24 BPS but remained in positive territory, to +1.271% at the weekly close.

Volatility indicators

The Dollar at its highest since May 2025, Brent continues to rise

The DXY index reached 102, its highest since May 2025, confirming the Dollar’s strong rebound internationally. At the same time, the persistence of geopolitical tensions continues to fuel Brent’s rise, to $105/bbl, reviving inflationary fears. Against this backdrop of heightened volatility, we recommend that operators hedge their transactions over short-term horizons.

EUR/USD outlook – BLOOMBERG

Broker forecasts were substantially revised this week. The pair is expected to trade around 1.15 in Q4-26, versus 1.16 last week. In Q1-27, the target is now lowered to 1.15, versus 1.16 a week earlier. In Q2-27, the pair should remain stable at 1.15, versus 1.16 last week. In Q3-27, the target is now raised to 1.16, versus 1.17 a week earlier. For 2027, the pair should trade around 1.17, versus 1.18 last week. Over the longer term, it is still expected at 1.18 for 2028 and at 1.20 for 2029, versus 1.19 last week.

From a macroeconomic standpoint, weekly releases showed mixed results in the United States. The September services PMI came in at 58.8, up +0.1 point, while the non-manufacturing ISM came in at 54.9, slightly below the consensus of 55.1. On the basis of these elements, and in the wake of the restrictive minutes from the latest meeting, markets continue to anticipate a monetary status quo from the Fed at the October FOMC, according to the CME FedWatch tool.

In the Eurozone, the S&P Global composite PMI came out stable in September, at 53.1, while August retail sales came in slightly below consensus, at 0.1%. The ECB minutes, highlighting a geopolitics-dependent outlook, reinforce investors’ expectation of a monetary status quo at the next meeting, according to the ECB Watch tool.

Downward revisions of our forecasts at the 1-month horizon

Given the EUR/USD forecasts and liquidity conditions on the foreign exchange market, we have revised our USD/MAD projections downward at the 1-month horizon.

Broker expectations on the EUR/USD point to an appreciation of the Euro against the Dollar over the 1-to-3-month horizons, relative to spot levels.

Dirham liquidity spreads, for their part, should ease at the 1-month horizon before narrowing at the 2-month and 3-month horizons, compared with current levels.

Under these conditions, the target levels for the USD/MAD pair come out at 9.70, 9.89 and 9.89 over the 1-month, 2-month and 3-month horizons, versus a spot level of 9.85.

The target levels for the EUR/MAD pair come out at 11.10, 11.32 and 11.32 at the 1-month, 2-month and 3-month horizons, versus a spot level of 11.04.