USD/XOF Outlook:
Slightly weaker, but likely to move sideways due to the rate being below its recent average and trading near recent lows.
Key drivers:
• Rate gap: The Federal Reserve has kept interest rates stable, increasing uncertainty around the USD compared to the XOF.
• Geopolitical tensions: Ongoing tariff threats from the U.S. are pressuring confidence in the USD, influencing its value.
• Economic stability: The Bank of Central African States has ruled out devaluation of the XOF, promoting stability amid regional changes.
Range:
The USD/XOF is expected to move within its recent range, showing little volatility as it drifts lower.
What could change it:
• Upside risk: A stronger-than-expected U.S. employment report may boost USD demand.
• Downside risk: Further geopolitical tensions could lead to increased USD selling pressure.