The USD to XPF market currently shows a bearish bias. Key drivers include the interest rate differential, with the Federal Reserve expected to cut rates three times by mid-2026, likely leading to a weaker USD. Additionally, improving global economic growth and rising commodity prices may contribute to this trend. Analysts also note that the current economic stability of the XPF due to its peg to the euro further supports its strength.
In the near term, the USD/XPF exchange rate is expected to trade within a range, with potential movement around current levels in the coming months. Upside risks could emerge from unexpected improvements in US consumer sentiment, which may bolster the USD. Conversely, downside risks include stronger-than-anticipated performance of the XPF or continued weakness in the USD fueled by further Federal Reserve rate cuts.