The USD to XOF market currently appears range-bound.
Three key drivers influence this outlook: The interest rate differential suggests potential weakening of the USD as the Federal Reserve plans future rate cuts. Improved global economic growth and rising commodity prices may also add volatility to the USD. Regarding macro factors, the ongoing introduction of a new currency by the Alliance of Sahel States could diminish demand for the XOF.
The expected trading range for the USD/XOF over the next few months is likely to be stable, reflecting current market conditions around recent highs.
An upside risk to this outlook could come if inflation pressures in the U.S. lead to interest rate adjustments. On the downside, negative developments from the AES's currency plans could impact the XOF's stability and value in international markets.