USD/WST Outlook:
The USD/WST is likely to decrease as it trades below its recent average and near recent lows. Current risk aversion is impacting the market, driving demand for the USD.
Key drivers:
• Rate gap: The US Federal Reserve is maintaining higher interest rates, while the Central Bank of Samoa is focused on reducing liquidity through government securities.
• Risk/commodities: Oil prices have surged amid geopolitical tensions, increasing global demand for USD as oil transactions are conducted in USD.
• One macro factor: Samoa's economic growth is projected at 3.2%, which may help stabilize the WST but is overshadowed by external pressures.
Range:
USD/WST is expected to hold within its recent range and may drift toward the lower end.
What could change it:
• Upside risk: A sudden easing of geopolitical tensions could boost investor confidence in the WST.
• Downside risk: Continued escalation of conflict in the Middle East could further drive the USD higher.
