The USD to XAF exchange rate is currently range-bound.
Key drivers include the anticipated Federal Reserve rate cuts, which could weaken the USD over the next few months, and the XAF's recent appreciation, boosted by investments and improving economic conditions in the Central African region. Additionally, ongoing discussions about reforms in the CFA franc system may impact the credibility and stability of the XAF.
The near-term trading range is expected to stay stable, remaining within a tight band around the current level, following the recent trend.
Upside risks to the USD could arise from stronger-than-expected U.S. economic data, which may delay the Fed's rate cuts. Conversely, a successful shift away from the USD in regional transactions by ASEAN could negatively impact the dollar's value in the long term.