USD/FJD Outlook: Bearish, with the rate trading significantly below its recent average and near recent lows.
Key drivers:
• Rate gap: The Federal Reserve is expected to cut rates further, which typically weakens the USD against currencies like the FJD.
• Risk/commodities: A volatile global atmosphere, highlighted by geopolitical tensions, is pressuring the USD lower.
• One macro factor: Recent increases in US jobless claims suggest economic weakness, adding pressure on the US dollar.
Range: The USD/FJD is likely to hold near current levels, but could drift lower within its recent range.
What could change it:
• Upside risk: A sudden improvement in US economic data could reverse some bearish trends for the USD.
• Downside risk: Further geopolitical escalations or negative developments in US fiscal policy might push the USD lower.