The current market bias for the SGD to AED exchange rate leans bearish.
Key drivers include the interest rate differential, as the Monetary Authority of Singapore has adopted an easing approach while the UAE Central Bank remains focused on economic growth, projecting a rise in GDP. Additionally, Singapore's positive growth forecasts for 2026 contrast with a more stable UAE economy, benefiting from strong non-hydrocarbon sectors.
The exchange rate is expected to trade within a stable range, relative to current levels, over the next couple of months. Recent fluctuations have shown the SGD to AED hovering around 2.8538, reflecting slight pressures.
An upside risk could come from unexpectedly strong economic data from Singapore, prompting a shift in monetary policy. Conversely, a significant escalation in geopolitical tensions affecting the Gulf region could negatively impact the AED, putting additional pressure on the Singapore Dollar.
