Bias: The CAD/SGD exchange rate is range-bound, as it is near the 90-day average and positioned in the middle of the 3-month range.
Key drivers:
- Rate gap: The Bank of Canada recently cut rates, signaling a cautious stance, while the Monetary Authority of Singapore has maintained an accommodative policy, allowing the SGD to remain relatively stable.
- Risk/commodities: Oil prices have recently been above average, which may support the CAD as Canada benefits from increased oil revenues.
- Economic growth outlook: Singapore's GDP growth is projected to steady at near-trend levels, which may bolster the SGD against the CAD amid ongoing global uncertainties.
Range: Movement in the CAD/SGD pair is likely to hold within the stable range it has maintained over recent months.
What could change it:
- Upside risk: A significant recovery in oil prices could strengthen the CAD.
- Downside risk: A worsening labor market situation in Canada may further weaken the CAD against the SGD.