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Dollar-Dirham Exchange Rate Declines 0.57% Amid Euro Gains and Global Turmoil

Dollar-Dirham Exchange Rate Declines 0.57% Amid Euro Gains and Global Turmoil
Sunday 08 December 2024 - 12:20 By: Dakir Madiha
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The dollar-dirham exchange rate depreciated by 0.57% during the week of November 25 to 29, falling from 10.06 to 10. This marks a significant drop after the pair remained above the 10 dirham threshold earlier in the week, according to a report from Attijari Global Research (AGR).

The decline was primarily influenced by a negative basket effect of 0.77%, driven by a rebound in the euro. However, the market effect offered a modest positive contribution of 0.2%, AGR detailed in its report, Weekly Mad Insights – Currencies.

In tandem, liquidity spreads for the dirham narrowed to -0.84%, with strong export flows playing a pivotal role in maintaining these spreads in negative territory. Despite this performance, AGR anticipates a slight upward adjustment in spreads over the coming three months.

Global factors also influenced the dollar’s depreciation. AGR highlighted that Donald Trump’s re-election campaign in the United States and escalating tensions between Russia and Ukraine added uncertainty to the market. Additionally, the potential economic and inflationary impact of Trump’s tariff policies remains unclear.

Given these conditions, AGR analysts recommend that market participants hedge their positions over a three-month horizon to mitigate the risks of ongoing volatility and uncertainty.

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