MAD World

The dirham has weakened by 1.8% against the euro since the beginning of March, in line with the US dollar decline. Although it has bounced off the key MAD11.10/EUR support level, we would not rule out a retest of this area, a close below which would be a negative signal. The basket peg dictates that the fate of the dirham depends on the euro, for which we currently envisage mild appreciation in the short-to-medium term. Against this backdrop, further dirham weakness against the euro is likely. That said, a dollar break of the key EUR1.2650/US$ level would be a positive

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