The USD to XOF exchange rate is currently range-bound.
Key drivers include the interest rate differential as the Federal Reserve is expected to implement additional rate cuts, potentially weakening the USD. Alongside this, rising global growth and commodity prices are influencing market activity. Additionally, the ongoing changes in the Economic Community of West African States, following the withdrawal of key countries, may affect confidence in the XOF.
In the near term, the USD to XOF rate is expected to trade within a stable range, reflecting its recent performance. Currently, it sits near its 3-month average, indicating limited volatility.
Upside risks to the XOF could stem from improved economic stability in the region, whereas downside risks include the potential introduction of a new currency by the Alliance of Sahel States, which may weaken the XOF further amid declining demand.
