CAD/SGD Outlook:
Slightly positive, but likely to move sideways, as the rate is near its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Bank of Canada has adopted a cautious approach while maintaining its rate, in contrast to Singapore's accommodative monetary policy which supports the SGD.
• Risk/commodities: Crude prices are currently above their recent average, which usually helps strengthen the CAD; however, recent fluctuations have added uncertainty.
• Macro factor: Canada’s flat economic growth has limited the loonie's potential, while Singapore’s robust growth has enhanced the SGD’s strength.
Range:
Expect CAD/SGD to hold steady in its recent range, as it trades near average levels.
What could change it:
• Upside risk: Stronger oil prices might boost the CAD if sustained.
• Downside risk: Continued weakness in Canada’s economic data could lead to further CAD depreciation.
