The AED to SGD market is currently range-bound.
The key drivers include:
- The interest rate differential is influenced by recent monetary policy easing in Singapore, while the UAE's economic growth outlook remains optimistic, suggesting a stable support for the AED.
- Economic forecasts indicate the UAE's GDP growth could reach 4.9% in 2025, strengthening the AED’s position.
- Singapore’s inflation is expected to moderate, balancing the monetary policy stance.
The near-term trading range for AED to SGD is expected to stay stable within recent levels, fluctuating slightly around current prices.
Potential factors that could shift the outlook include an upside risk from significant positive data on UAE economic performance, which could strengthen the AED further. Conversely, a downside risk could arise if Singapore's growth falls short of expectations, forcing the MAS to revise its monetary policy, which may weaken the SGD against the AED.