EUR/WST Outlook:
The EUR/WST exchange rate is likely to decrease as it currently trades below its recent average and is near recent lows. This is compounded by a lack of strong indicators supporting a recovery for the euro.
Key drivers:
• Rate gap: The European Central Bank is maintaining an accommodative policy, while the Central Bank of Samoa is focused on addressing excess liquidity, creating a widening disparity between the two currencies.
• Risk/commodities: Oil prices have reached recent highs, which can pressure the euro lower since the EU relies on energy imports, affecting economic stability.
• One macro factor: Consumer confidence in the Eurozone remains weak, with recent data showing improvement but still falling short of expectations, adding pressure to the euro.
Range:
The EUR/WST is expected to hold within its stable range, likely drifting toward the lower end.
What could change it:
• Upside risk: A significant improvement in Eurozone PMI data could bolster the euro's position.
• Downside risk: Further geopolitical tensions or economic instability in the EU may weaken the euro further.
