The current market bias for the EUR to XAF exchange rate is range-bound.
The key drivers include the interest rate differential, as the European Central Bank (ECB) keeps its rates steady while managing inflation fears. On another front, recent growth projections for the Eurozone suggest a potential uplift for the euro, but broader geopolitical concerns continue to exert pressure. Meanwhile, the Central African CFA Franc (XAF) has recently appreciated against the US dollar, indicating some strength that could affect its exchange rate with the euro.
For the near-term trading range, the EUR to XAF exchange rate is expected to remain close to its recent average.
An upside risk could come from any positive developments in the Eurozone, such as robust consumer confidence data, which may support the euro’s strength. Conversely, a downside risk could emerge if continued geopolitical tensions, such as the ongoing war in Ukraine, negatively influence the euro's stability and investor sentiment.