The current market bias for the GBP to XOF exchange rate is range-bound. Key drivers include a projected interest rate cut by the Bank of England as inflation and growth slow, while West African economies grapple with the implications of the Alliance of Sahel States forming and potentially introducing a new currency, which may affect demand for the XOF. Additionally, Nigeria's recent move to approve the use of the CFA franc for export proceeds repatriation could enhance trade efficiency in the region.
The expected near-term trading range for GBP to XOF is likely to remain stable within its recent 2% range. Upside risks could arise from stronger-than-expected economic recovery signals in the UK, while a downside risk includes the further destabilization of the XOF following changes in membership among CFA franc users, which could reduce demand for the currency. As of now, GBP to XOF trades at 755.9, slightly above its 3-month average of 749.8.