The recent exchange rate forecasts indicate a mixed outlook for the USD/XPF pair, influenced by various economic factors and geopolitical developments. The US dollar has shown strength following a hawkish stance from the Federal Reserve, with analysts noting that interest rate expectations are being recalibrated. Fed Chair Jerome Powell hinted that further rate cuts in December are not guaranteed, which has led to speculation on continued USD strength.
In terms of key factors, the U.S. Consumer Price Index (CPI) report for July is anticipated, with a projected 0.3% rise in core prices that could sway the Federal Reserve’s future decisions. Emerging trade tensions with China also have the potential to exert pressure on the dollar, while ongoing "dedollarization" efforts by various countries may result in long-term challenges for the USD's status as a reserve currency.
On the other hand, the CFP franc has recently experienced a slight depreciation against the dollar, with the exchange rate rising to 103.0240, reflecting a 0.29% increase from the previous session. Despite this, over the last year, the CFP franc has appreciated by 5.66%, showcasing a longer-term strengthening trend. New Caledonia's inflation increased modestly to 1.10% in August, and with interest rates held steady at 2.00%, the currency remains stable compared to the USD.
Looking ahead, experts forecast that the USD/XPF exchange rate could stabilize around 102.31 by the end of the quarter. The current rate of 102.9 is only slightly above its three-month average of 102.2, trading within a narrow range of 2.8% from 100.6 to 103.4. Currency analysts suggest that markets will closely monitor ongoing economic signals and geopolitical developments that could influence this pair in the coming months.
