USD/SBD Outlook:
Bearish, as the rate is below its recent average and near recent lows amidst pressure from recent economic signals.
Key drivers:
• Rate gap: The Federal Reserve has paused interest rate cuts, which can limit support for the US Dollar compared to the Solomon Islands Dollar's expansionary approach.
• Risk/commodities: The declining oil prices may impact the USD, as lower oil prices can weaken the currency, affecting its overall demand.
• One macro factor: Increasing geopolitical tensions, particularly related to U.S. trade policies, have contributed to declining investor confidence in the USD.
Range:
The USD/SBD pair is likely to hold steady within its recent range as downward pressure limits significant movement.
What could change it:
• Upside risk: A surprising rebound in U.S. economic indicators could bolster the USD.
• Downside risk: Further escalations in geopolitical tensions could lead to additional declines in the USD.
