North Africa FX: Dollar Bounce Won't Help Local Exports

Our global team's medium-term EUR/US$ view suggests that the upside seen last week for the Moroccan dirham and Tunisian dinar will be short-lived. Indeed, as the chart shows, the dirham has already started retracing back towards short-term support at around MAD8.20/US$. This is potentially bad news for the North African economies, because it will translate into upside against the euro, reducing already suppressed exports of goods and services (primarily tourism) to the eurozone.

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