The USD/MAD pair continues to follow its uptrend, reaching a new 20-year all-time high at 10.8089 during the week of September 12-16, according to Attijari Global Research (AGR).
Originally, a double restrictive effect for the MAD, Basket/Market of respectively +0.49% and +0.12%, explains AGR in its recent note “Weekly Mad Insights – Currencies”.
To this end, liquidity spreads posted an increase of +12.4 PBS to 3.63% at the end of this week, reflecting operators’ expectations of substantial import flows in the short term.
The dirham should appreciate against the dollar over the next 1, 2 and 3 months, according to the same note, for the period from 12 to 16 September. “Due to the liquidity conditions on the foreign exchange market, we have revised downwards our forecasts of the USD/MAD at horizons 1 and 2 months. Faced with the spot rate, the MAD should appreciate against the dollar over the next 1, 2 and 3 months,” says AGR.
Taking into account the end of the summer season, and pending the end of dividend increases abroad, we believe that import and export flows should rebalance in CT, according to AGR analysts.
The target levels of the USD/MAD parity stand at 10.75, 10.75 and 10.70 at horizons of 1, 2 and 3 months against a spot price of 10.81. Against the Euro, the Dirham should appreciate over the next 1 month, 2 months and 3 months. The target levels of the EUR/MAD parity stand at 10.45, 10.45 and 10.40 at horizons of 1, 2 and 3 months against a spot price of 10.79.
For its part, the banking foreign exchange position is strengthening to more than 5 billion dirhams (MMDH) on a weekly average, ie a high of one year according to the latest data published by Bank Al Maghrib, notes AGR.
AGR analysts also note that investors are scrutinizing monetary policy decisions by the Fed and the ECB, fueling intense volatility in the currency markets, thus recommending investors to reduce their hedging horizons.