CAD/SGD Outlook:
Slightly positive, but likely to move sideways as CAD is near its recent average and lacks a clear driver for stronger movement.
Key drivers:
• Rate gap: The Bank of Canada remains steady with its interest rates, while the Monetary Authority of Singapore has shifted towards a more accommodative monetary policy, favoring the SGD.
• Risk/commodities: Recent trends in oil prices, with Brent Crude OIL/USD trading significantly above its average, support the CAD, but the volatility may cap substantial gains.
• One macro factor: Singapore's economy demonstrated robust growth, which has recently bolstered confidence in the SGD's performance.
Range:
The CAD/SGD is likely to hold within its recent range, potentially testing the extremes but lacking strong impetus for significant changes.
What could change it:
• Upside risk: Sustained high oil prices could strengthen the CAD further against the SGD.
• Downside risk: Continued weakening in trade relations between the US and Canada may pressure the CAD lower.
