Being pegged to the euro at CFAfr655.96:EUR1, the CFA franc fluctuates in line with euro:dollar movements. Despite improving growth in the US and ongoing fiscal and sovereign debt concerns in the euro zone, the euro is now expected to sustain its recovery 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 2011, before drifting back to CFAfr507:US$1 in 2012.