The takeaway …
I received a view of my blog from Morocco. That is the cool thing about this blog; I get to engage with people from around the world. I have never been to Morocco or the African continent for that matter. My son has been to Morocco and I have family in The Gambia, so I guess I am late to the party.
Out of curiosity I took a look at the exchange rate over on OANDA, a broker. This morning, the USD/MAD had a bid price of 10.1601 and an ask price of 10.4085 or a spread of 0.2484. That comes out to 2,484 pips. A spread of 2,484 pips is considered very wide. According to investor education website Investopedia, a spread of 50 pips is considered wide but still typical.
While Morocco has had a long and relatively stable relationship with the United States since 1777, Morocco is not in the upper echelon of U.S. trading partners. According to the CIA World Factbook, seven percent of Morocco’s imports come from the United States. No data on percentage of exports to the United States was provided.
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According to the U.S. Department of State, since the United States and Morocco entered a free trade agreement in 2006, Moroccan exports to the United States have doubled while U.S. exports to Morocco have quadrupled. The wide broker spreads, however, signal to me that the USD/MAD is still an exotic pair with nary much liquidity entering that market.
Hopefully my new friend in Morocco will keep visiting my blog as spreads in the USD/MAD get tighter.
Alton Drew
1 November 2023
The stats …
30-Day Federal Funds Futures and Options: 94.615
Effective Federal Funds Rate: 5.33%
Discount Window Rate: 5.50%
Interest on Reserve Balances: 5.40%
Federal Funds target range: 5.25-5.50%
EUR/USD=1.05347
GBP/USD=1.21219
AUD/USD=0.63600
USD/JPY=151.07620
Sources: Board of Governors-Federal Reserve. CME Group. x-rates.com.
Disclaimer: The data and output from this blog post does not constitute investment or legal advice and is not a personal recommendation from Alton Drew. Nothing contained herein constitutes the solicitation of the purchase or sale of any futures or options. Any investment activities undertaken will be at the sole risk of the reader. Alton Drew expressly disclaims all liability for the use or interpretation (whether by visitor or by others) of information contained herein. Decisions based on this information are the sole responsibility of the reader. Any visitor to this page agrees to hold Alton Drew harmless against any claims for damages arising from any decisions that the visitor makes based on such information.
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