AUD/SGD Outlook:
The AUD/SGD is likely to increase as it is currently trading above its recent average and is near recent highs. This upward momentum is supported by robust employment figures from Australia, indicating stronger economic conditions.
Key drivers:
• Rate gap: The Reserve Bank of Australia's potential for further rate tightening contrasts with a more dovish approach from the Monetary Authority of Singapore, favoring the AUD.
• Risk/commodities: Steady demand for key Australian exports driven by China's economic recovery is boosting the AUD as commodity prices remain stable.
• One macro factor: Recent strong employment data in Australia reflects domestic economic resilience, enhancing the outlook for the AUD.
Range:
Expect the AUD/SGD to drift within its recent range as it maintains upward pressure but may face short-term corrections.
What could change it:
• Upside risk: A significant improvement in Australia's future economic data could accelerate gains for the AUD.
• Downside risk: Any renewed geopolitical tensions or adverse economic news from China may weaken the AUD.