The Canadian dollar (CAD) has faced downward pressure in recent weeks, primarily influenced by falling oil prices, which are crucial for Canada as a significant oil exporter. With oil prices currently at $66.99, approximately 3% below the three-month average of $69.07 and highly volatile, this decline has negatively impacted the CAD's appeal in the currency markets.
Analysts noted that the CAD recently traded at 7-day lows near 0.9326 against the Singapore dollar (SGD), which is just below its three-month average. The CAD's trading range from 0.9258 to 0.9436 suggests a period of stability amidst the prevailing challenges.
Recent labor market data indicates potential further weakness for the CAD, as employment figures suggest a rise in unemployment to a near four-year high of 7%. Such trends could exacerbate concerns over the Canadian economic outlook, particularly given that the currency's performance is heavily tied to domestic economic indicators.
On the other hand, the SGD's strength has been somewhat supported by a surprise GDP growth of 1.4% in Q2 2025, which helped Singapore avoid a technical recession. However, the Monetary Authority of Singapore has previously eased monetary policy to mitigate risks from global trade uncertainties, indicating that the SGD may not maintain its current strength. The currency's outlook amidst unresolved trade tensions is uncertain, as experts warn that the appreciation observed may not be sustainable.
Market experts have pointed out that the direction of the CAD-SGD exchange rate will heavily depend on future developments in oil prices, domestic Canadian economic data, and broader global trade dynamics. As geopolitical tensions and economic indicators fluctuate, the respective strength of both the CAD and SGD will likely react to these external pressures, influencing exchange rate trends in the near term.
