The current market bias for USD to XOF is bullish.
Key drivers include the Federal Reserve's likely interest rate cuts aimed at stabilizing the economy, which may soften the USD. Additionally, the Bank of Central African States raised its policy rate to 4.75% to support the XOF and improve foreign reserves. On the macroeconomic front, declining foreign reserves in the central African region highlight ongoing financial pressures.
The near-term trading range for the USD to XOF is expected to remain stable, oscillating around recent highs.
An upside risk could arise from stronger-than-expected job data in the U.S., possibly bolstering the USD further. Conversely, political instability in the U.S. or further efforts by West African nations to move away from the XOF could negatively impact the exchange rate.
