USD/XPF Outlook:
The USD/XPF exchange rate is likely to move sideways, as it is currently just below its recent average and trading in the mid-range of its three-month variation. This stability reflects mixed signals in economic data.
Key drivers:
• Rate gap: The Federal Reserve's cautious stance on interest rates continues to influence the USD, while the XPF benefits from its peg to the Euro and relative stability in the region.
• Risk/commodities: Oil prices have shown volatility lately, affecting USD while providing some support to XPF given its ties to the Eurozone economy.
• One macro factor: Upcoming durable goods orders from the US are anticipated to contract, which may pressure the dollar further.
Range:
The USD/XPF is expected to hold within its established range, presenting limited movement outside of recent extremes.
What could change it:
• Upside risk: Stronger-than-expected US job data could bolster the dollar.
• Downside risk: A significant contraction in US economic indicators may weaken USD.
