AUD/SGD Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of Australia is expected to consider interest rate increases, contrasting with the Monetary Authority of Singapore adopting a more accommodative stance.
• Risk/commodities: Stronger Chinese economic data is supporting demand for the Australian dollar, benefiting from Australia’s key exports like iron ore.
• One macro factor: Upcoming Australian economic releases, particularly the Consumer Price Index and Labour Force report, could impact the AUD if results vary from expectations.
Range: The AUD/SGD is likely to hold within its recent trading range, showing stability without strong directional movement.
What could change it:
• Upside risk: A surprising positive shift in Australian economic indicators could boost the AUD further.
• Downside risk: Negative developments in China's economy might weaken demand for Australian exports, impacting the AUD adversely.
