The CFA franc-pegged to the euro at CFAfr655.96:EUR1-will fluctuate against the US dollar in line with the euro:dollar exchange rate. Despite improving growth in the US and ongoing fiscal and sovereign debt concerns in the euro zone, the euro will sustain its recovery in place since mid-2010 given the tightening of ECB rates. We now envisage a firming of the euro-pegged franc from an average of CFAfr495:US$1 in 2010 to CFAfr481:US$1 in 2011, before weakening to CFAfr507:US$1 in 2012.