The current market bias points towards a bearish outlook for the USD against the XOF.
Key drivers include expectations of three more interest rate cuts from the Federal Reserve by mid-2026, which may weaken the USD. Additionally, global economic growth and rising commodity prices could increase volatility for the dollar. A macro factor to note is the announcement of a potential new currency by the Alliance of Sahel States, which could diminish demand for the XOF.
Near-term, the USD to XOF is expected to trade within a stable range, reflecting recent highs near 559.1, not far from the 3-month average of 563.4, maintaining a relatively narrow 2.7% range.
Upside risks include any unexpected resilience in the U.S. economy that could support the USD. On the downside, the risk of the new AES currency could create uncertainty and pressure the XOF, impacting its stability.
