The USD to XAF exchange rate currently has a bearish bias as the dollar shows signs of vulnerability due to upcoming Fed rate cuts.
Key drivers include:
- The Federal Reserve's anticipated rate cuts, which may weaken the USD.
- The XAF's recent appreciation against the dollar, bolstered by increasing regional investment and economic activity.
- Initiatives like China's investment in Cameroon could enhance economic stability for the XAF.
In the near term, the expected trading range for the USD to XAF is likely to stay within a stable band, reflecting recent trends.
Upside risks include stronger-than-expected U.S. economic data, which could support the dollar. Conversely, downside risks may arise from increased global adoption of alternative currencies in trade, diminishing the dollar's role.
