The current market bias for the USD to XAF exchange rate is bearish.
Key drivers include:
- Interest rate expectations indicate that the Federal Reserve may implement further rate cuts, leading to a weaker US dollar in the near term.
- The XAF has recently appreciated as it strengthened by 1.89% against the USD, reflecting positive market sentiment towards the CFA franc.
- Ongoing discussions about potential reforms in the CFA franc system may enhance the XAF’s stability and confidence.
The expected trading range for the USD/XAF over the next 1 to 3 months suggests continued stability, possibly remaining within a narrow band.
Upside risks could arise from unexpected improvements in US economic data that could support the dollar. Conversely, downside risks may stem from the anticipated depreciation of the USD due to further Federal Reserve rate cuts. These factors will be key to watch in the coming months for those involved in currency transactions.