The Australian dollar (AUD) has recently shown mixed performance against the Singapore dollar (SGD), influenced by a combination of domestic economic data and external market sentiment. The AUD traded sideways amid a cautious market, particularly affected by underwhelming employment figures that have led investors to reconsider expectations around the Reserve Bank of Australia's (RBA) monetary policy. Positive economic signals from China, Australia's largest trading partner, are anticipated to provide some support for the AUD at the start of the week.
Recent developments indicate an uptick in Australian household spending, with a significant rise of 1.3% in October, which is expected to contribute to speculation over a potential RBA interest rate hike. Additionally, economic growth in Australia has accelerated, with GDP recording a 2.1% year-on-year increase in Q3 2025, further enhancing the bullish outlook for the AUD. This strong economic performance has fueled speculation about a shift in the RBA's policy stance, especially amid rising inflation concerns, which recently reached a ten-month high at 3.8%.
On the other hand, the Singapore dollar (SGD) has faced downward pressure due to global trade tensions and adjustments in the Monetary Authority of Singapore’s (MAS) policy. The MAS previously reduced the slope of its exchange rate policy band, which allowed for a more gradual appreciation of the SGD amidst economic challenges. The Singaporean economy did expand by 2.9% year-on-year in the third quarter, exceeding expectations, but the continued trade pressures are a concern.
In recent exchange rate movements, the AUD to SGD is currently at 7-day lows around 0.8565, which is only slightly above its three-month average of 0.8492, having experienced a stable trading range of 2.9%. Analysts suggest that as long as household spending and inflation data support a hawkish RBA stance, the AUD could strengthen against the SGD despite external pressures. A close watch on both domestic economic indicators in Australia and geopolitical developments will be crucial for predicting the future trends of the AUD/SGD exchange rate.
