The EUR to XPF exchange rate remains range-bound as the euro faces pressure from the European Central Bank (ECB)’s cautious stance regarding its strength.
Key drivers include the interest rate differential, with the ECB keeping rates stable while maintaining a watchful eye on inflation impacts. Additionally, inflation control measures by the ECB and anticipated eurozone growth could affect the euro's value. The eurozone's GDP growth projections for 2026, bolstered by fiscal measures, offer a macroeconomic support factor.
In the near term, the EUR/XPF rate is expected to fluctuate around its current price level, reflecting stability around the recent 3-month average. An upside risk could arise from improved consumer confidence in Germany providing positive sentiment for the euro, while a downside risk includes heightened geopolitical tensions or further uncertainty in global trade dynamics, which may lead to euro weakness.