USD/FJD Outlook:
Bearish, as the rate is below its recent average and near recent lows, pressured by significant external factors.
Key drivers:
• Rate gap: The Federal Reserve's hold on interest rates contrasts with the Reserve Bank of Fiji's low rate, creating pressure on the USD.
• Risk/commodities: Ongoing global trade tensions are impacting the USD negatively, while the FJD has strengthened recently due to robust currency performance.
• One macro factor: Geopolitical tensions and tariff threats from the U.S. administration are leading to concerns about currency stability, further diminishing the USD's appeal.
Range:
The USD/FJD is likely to drift within its recent 3-month range due to prevailing market pressures.
What could change it:
• Upside risk: A significant rebound in U.S. job growth or economic data could boost the USD.
• Downside risk: Continuing global trade tensions and a further decline in U.S. interest in domestic assets could weaken the USD more.