EUR/XAF Outlook:
The EUR/XAF is slightly positive, but likely to move sideways as it's trading near its recent average and high within a stable range. Recent pressures on the euro from weaker German data could limit significant gains.
Key drivers:
• Rate gap: The European Central Bank's stable interest rate contrasts with the Central African Bank's efforts to ensure currency stability.
• Risk/commodities: A notable rise in oil prices could support the euro, given its impact on inflation and energy costs in the Eurozone.
• One macro factor: Ongoing economic uncertainty reflected in weaker consumer confidence in Germany affects the euro's strength.
Range:
The EUR/XAF is expected to hold within its current range as external factors exert mixed influence on price movement.
What could change it:
• An improved economic sentiment index for the Eurozone could boost the euro significantly.
• Any resurgence of concerns regarding the Central African CFA Franc's stability could pressure the XAF downward.
