Bias: bearish-to-range-bound, as USD/SBD sits below its 90-day average and sits in the lower half of the recent 3-month range.
Key drivers:
- Rate gap: The Fed is expected to ease toward a neutral stance this year, while the Central Bank of Solomon Islands maintains an expansionary bias, narrowing the USD-SBD policy gap.
- Macro factor: Upcoming US payrolls and unemployment readings will steer Fed timing and USD moves.
Range: The pair is likely to drift within the 3-month range, with a modest pull toward the lower end if risk appetite softens.
What could change it:
- Upside risk: Strong US jobs data or hawkish Fed talk that keeps rate-cut expectations limited and supports the USD.
- Downside risk: A clearer path to easier US policy paired with continued CBSI stimulus or tourist boost lifting the SBD.
