The current market bias for the USD to WST exchange rate is bearish.
Key drivers include:
- The Federal Reserve is expected to cut interest rates further, leading to a weaker USD as monetary easing increases.
- Economic recovery in global markets and rising commodity prices could pressure the USD but might support the WST in a stable manner.
- Samoa’s Central Bank maintains its policy stance, focusing on liquidity issues while projecting economic growth of 3.2% for the upcoming fiscal year, which supports the WST.
In the near term, the USD to WST exchange rate is expected to trade within a range that reflects slight fluctuations but remains around current highs.
Upside risks include any surprises in US economic data that could bolster the USD unexpectedly. Downside risks might stem from further deterioration in the USD's global position, bolstered by ASEAN countries moving away from using the USD for transactions in favor of local currencies.