The USD to FJD exchange rate has recently seen a downward trend, with the USD trading at 14-day lows near 2.2518. This position reflects a stable range over the past three months, holding between 2.2327 and 2.2738. Analysts attribute this dip in the USD value to thin trading conditions stemming from the recent Labor Day holiday, which has limited market activity.
Key factors influencing the USD include expectations of deteriorating economic conditions, as highlighted by the anticipated ISM manufacturing PMI, which forecasts the US factory sector to report its sixth consecutive decline. Additionally, the ongoing federal appeals court ruling regarding tariff measures could add pressures that impact the dollar further. The market is also closely monitoring upcoming inflation data, expected to influence Federal Reserve policy, especially given recent comments from Treasury Secretary Scott Bessent about the need for new leadership at the Fed to address broader organizational challenges.
On the other side, the Fijian dollar (FJD) faces its own set of challenges. The International Monetary Fund (IMF) has projected Fiji's GDP growth to slow to 2.6% in 2025, primarily due to a decline in tourism, which has dropped visitor arrivals by 5.3% in the first quarter of the year compared to the previous year. The Reserve Bank of Fiji has opted to maintain a low overnight policy rate of 0.25%, aligned with stable inflation and adequate foreign reserves. Moreover, the government is implementing fiscal measures, such as reducing the Value Added Tax from 15% to 12.5%, aimed at alleviating the cost of living for residents.
These developments could create further volatility in the USD to FJD exchange rate, as fluctuations in tourism and economic growth projections continue to mold the FJD's performance. Market experts suggest that the interplay of these factors will be crucial in determining the direction of the USD against the FJD in the coming weeks, especially as both currencies react to domestic pressures and global market conditions.
