Recent forecasts and updates suggest a complex outlook for the SGD to AED exchange rate, reflecting both domestic and international economic developments.
In December 2025, the SGD has reached 60-day highs of approximately 2.8440, which is notable given its stable range of 2.8074 to 2.8786 over the past three months. Analysts attribute this upward movement in the SGD to the recent adjustments in Singapore’s monetary policy. The Monetary Authority of Singapore (MAS) had eased its monetary policy in January 2025, lowering the slope of the exchange rate policy band to support economic growth amid weaker-than-expected inflation. However, October's strong economic performance, with a year-on-year growth of 2.9% in Q3, prompted MAS to maintain its monetary policy settings, despite ongoing external pressures, including trade tensions with the U.S.
Meanwhile, factors affecting the AED include expectations of potential U.S. Federal Reserve interest rate cuts due to softening labor market conditions. Such moves have spurred optimism in Gulf markets, positively influencing the valuation of the UAE Dirham. The U.S. dollar's strength in July also reinforced the AED, as expatriates benefited from favorable exchange rates. Furthermore, projections indicating significant growth in both Abu Dhabi and Dubai support the AED's stability.
However, the recent upswing of the SGD against the AED may continue to be challenged by the weak performance of other Asian currencies along with ongoing concerns regarding trade dynamics and inflation projections. Forecasters suggest monitoring the developments closely, as any shifts in policy from MAS or significant changes in global economic conditions could sway the SGD's performance against the AED in the near future.
Overall, while the SGD is currently strong, factors such as regional economic stability and evolving monetary policies in both Singapore and the UAE will be pivotal in determining future exchange rate movements.
