USD/XPF Outlook:
Bearish, with the rate below its recent average and near recent lows.
Key drivers:
• Rate gap: The Federal Reserve has held steady on rates, while the Bank of France has maintained a stable policy, giving the USD less support.
• Risk/commodities: Concerns about US labor strength and geopolitical tensions are impacting demand for the dollar, contributing to its decline.
• One macro factor: The trend of "sell America" has emerged, with investors reducing exposure to U.S. assets, leading to further weakness in the USD.
Range:
The USD/XPF is likely to drift within its recent range as market dynamics remain uncertain.
What could change it:
• Upside risk: Positive US retail sales data could boost the dollar.
• Downside risk: Continued geopolitical tensions may further pressure the US dollar.