Bias: Bearish-to-range-bound, as the USD is below the 90-day average and trading in the lower half of the 3-month range.
Key drivers:
- Rate gap: The Federal Reserve's anticipated rate cuts may weaken the USD against the WST as interest rates converge.
- Risk/commodities: Oil prices have remained volatile, which could pressure the USD if they rise, given its ties to economic outlooks.
- Macro factor: The Central Bank of Samoa's efforts to reduce excess liquidity aim to stabilize the economy, potentially supporting the WST.
Range: The USD/WST is likely to hold within its recent stable range, as both currencies reflect ongoing economic adjustments.
What could change it:
- Upside risk: Strong economic data from the US could prompt USD strength.
- Downside risk: A significant escalation in geopolitical tensions might lead to a lower USD value against the WST.
