The EUR to XPF exchange rate is currently range-bound, reflecting stability around its three-month average of 119.3. The key drivers include the European Central Bank's (ECB) interest rate strategy, which remains data-driven and aims to control inflation while supporting growth. Additionally, Bulgaria’s upcoming euro adoption in 2026 enhances the eurozone's economic stability, potentially strengthening the EUR further.
The CFP franc's fixed peg to the euro at €8.38 adds to its stability, alongside low inflation rates observed in the French Pacific territories. In the near term, the EUR/XPF is expected to trade within its recent range, continuing to balance the ECB's monetary policy impacts against macroeconomic factors.
Upside risks could arise from positive economic developments in the eurozone, while downside risks may include geopolitical tensions, particularly related to the ongoing war in Ukraine and fluctuations in global oil prices, currently trading below their recent averages.