USD/XPF Outlook:
Slightly positive, but likely to move sideways as the rate is just below its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Federal Reserve has paused interest rate cuts, maintaining a cautious approach in light of the economy, while the dynamic for the XPF remains stable.
• Risk/commodities: The overall tone in the FX market is subdued, with geopolitical tensions creating uncertainty, impacting investor confidence in USD assets.
• One macro factor: Upcoming jobless claims data could provide fresh insights into the U.S. labor market, influencing future USD strength.
Range:
The USD/XPF is likely to hold within its recent stable range, potentially testing low and high extremes but with limited movement.
What could change it:
• Upside risk: Better-than-expected employment data could boost confidence in the USD.
• Downside risk: Continued geopolitical tensions or a further reduction in demand for U.S. assets could weaken the dollar.
