Bias: The NZD/SGD shows a bearish-to-range-bound outlook, as it is currently below the 90-day average and within the lower half of the 3-month range.
Key drivers:
- Rate gap: The Reserve Bank of New Zealand is easing its monetary policy, contrasting with the Monetary Authority of Singapore’s more stable stance, which may put further pressure on the NZD.
- Risk/commodities: The cautious market mood has left the New Zealand dollar vulnerable, likely restricting its recovery against the Singapore dollar as risk appetite diminishes.
- One macro factor: Ongoing U.S. tariffs on New Zealand exports have raised concerns about economic growth, affecting the NZD's performance.
Range: The NZD/SGD is likely to drift lower within its recent range, staying close to the lower end due to prevailing economic pressures.
What could change it:
- Upside risk: A surprising rebound in global trade could enhance the NZD's strength.
- Downside risk: Continued negative sentiment towards riskier currencies may deepen the NZD's decline against the SGD.