GBP/SGD Outlook: Slightly positive, but likely to move sideways, as the rate is just above its recent average but lacks a strong current driver.
Key drivers:
• Rate gap: The Bank of England is likely to reduce rates slowly, while Singapore’s Monetary Authority is maintaining an accommodative stance, affecting the relative strength of both currencies.
• Risk/commodities: Oil prices are currently below average, which could impact the UK’s economic outlook and the strength of the pound as global trade remains volatile.
• One macro factor: Ongoing US tariffs may hinder UK exports, contributing to a cautious growth outlook for the pound.
Range: GBP/SGD is expected to drift within the recent range, as it sits positioned moderately above average.
What could change it:
• Upside risk: A significant improvement in UK economic data, particularly in job growth or wage increases, could enhance the pound's position.
• Downside risk: Escalation of US tariff threats could pressure the pound further, widening the gap with the Singapore dollar.
