EUR/XOF Outlook:
The EUR/XOF exchange rate is likely to move sideways, as it is currently near its 90-day average and within a stable range. The euro's performance remains mixed against a backdrop of geopolitical tensions and variable economic indicators.
Key drivers:
• Rate gap: The European Central Bank maintains a policy aimed at managing inflation, while the West African Central Bank has emphasized the stability of the XOF, providing a balanced contrast.
• Risk/commodities: Oil prices are significantly higher than average, affecting the economics of the Eurozone and thereby influencing the euro's value against the XOF.
• One macro factor: The ongoing war in Ukraine continues to create uncertainty for the euro, impacting consumer confidence and economic growth prospects.
Range:
Expect the EUR/XOF to hold within its recent 3-month stability, likely drifting slightly without significant movements in either direction.
What could change it:
• Upside risk: A shift towards stronger economic data from the Eurozone could support the euro’s rise.
• Downside risk: Renewed geopolitical tensions or negative economic indicators could lead to downward pressure on the euro against the XOF.