USD/FJD Outlook:
Bearish, as the rate is below its recent average and near recent lows, affected by various drivers.
Key drivers:
• Rate gap: The Federal Reserve's decision to hold interest rates steady contrasts with the Reserve Bank of Fiji’s efforts to support economic growth through low rates.
• Risk/commodities: Recent soft inflation in the U.S. has reduced demand for USD, potentially increasing pressure on the FJD.
• One macro factor: The Reserve Bank of Fiji has been advised to monitor global trade tensions that could negatively impact Fiji's exports, influencing FJD's stability.
Range:
USD/FJD is likely to drift within its recent range, maintaining relatively stable movement.
What could change it:
• Upside risk: A sudden increase in global demand for USD as a safe haven amid geopolitical tensions could boost the rate.
• Downside risk: Continued global trade tensions or adverse economic conditions in Fiji could further weaken the FJD against the USD.
