USD/FJD Outlook:
The USD/FJD rate is likely to decrease as it trades approximately 2.4% below its 90-day average and near recent lows. This downward pressure is driven by recent data showing stagnant economic indicators.
Key drivers:
• Rate gap: The Federal Reserve's aggressive rate hikes have contributed to a stronger USD, while the Reserve Bank of Fiji has maintained a low policy rate, limiting the FJD's appeal.
• Risk/commodities: With ongoing geopolitical tensions, the demand for safe-haven assets like the USD has increased, affecting the FJD negatively.
• One macro factor: Projected slow economic growth in Fiji at 2.6% may dampen confidence in the FJD.
Range:
The USD/FJD is likely to drift lower within its recent range, testing the lower extremes.
What could change it:
• Upside risk: A surprise increase in US economic data could boost the USD.
• Downside risk: A geopolitical resolution leading to reduced demand for safe havens could weaken the USD further.