USD/SBD Outlook: Slightly weaker, but likely to move sideways as the rate is below its recent average and near recent lows.
Key drivers:
• Rate gap: The Federal Reserve is expected to cut rates, which may weaken the US dollar against the Solomon Islands dollar.
• Risk/commodities: Oil prices are currently below average, impacting the US economy and potentially limiting the USD's strength.
• One macro factor: The Solomon Islands' expansionary monetary policy aims to support growth, which may provide a buffer for the SBD.
Range: The USD/SBD is likely to drift within its recent 3-month trading range as it remains stable but lacks a strong driver for significant movement.
What could change it:
• Upside risk: A robust US economic report could reverse downward expectations for the USD.
• Downside risk: If inflation in the Solomon Islands rises unexpectedly, it could pressure the SBD negatively.
