USD/XPF Outlook: Bearish, as the rate is below its recent average and facing pressure from geopolitical and economic uncertainties.
Key drivers:
• Rate gap: The Federal Reserve's anticipated rate cuts are contributing to a weaker outlook for the USD compared to the CFP Franc's stable issuance by the Institut d'Émission d'Outre-Mer.
• Risk/commodities: Recent geopolitical tensions and threats associated with US actions in Venezuela and trade disputes are adding to volatility in the USD.
• One macro factor: An increase in US jobless claims has intensified concerns over economic stability in the US.
Range: The USD/XPF is likely to drift lower, remaining within its recent range while struggling against negative pressures.
What could change it:
• Upside risk: A positive shift in geopolitical developments could bolster confidence in the USD.
• Downside risk: Further escalation of US government instability or military issues could strengthen the bearish outlook on the USD.
