USD/FJD Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and close to recent lows.
Key drivers:
• Rate gap: The U.S. Federal Reserve's pause on further rate cuts contrasts with the Reserve Bank of Fiji's stable growth projection, potentially weakening the USD against the FJD.
• Risk/commodities: With global market concerns heightened due to geopolitical tensions, investors may favor stability, impacting the value of the USD negatively.
• One macro factor: Fiji's economic growth forecast of 3% for 2026, supported by rising visitor arrivals, may provide some strength to the FJD.
Range: The USD/FJD pair is likely to drift within its recent range as external pressures weigh on the USD.
What could change it:
• Upside risk: A stronger-than-expected manufacturing report from the U.S. could boost confidence in the USD.
• Downside risk: Increased geopolitical tensions or further declines in U.S. asset attractiveness may continue to pressure the USD lower.