Forecasts for SGD to AED
The recent announcement by U.S. President Donald Trump regarding a 10% tariff on Singapore imports has significantly impacted the outlook for the Singapore Dollar (SGD) against the United Arab Emirates Dirham (AED). Analysts suggest that the imposition of tariffs is part of a growing trade conflict, which could weigh heavily on emerging Asian currencies, including the SGD. The ongoing uncertainty surrounding trade relations is expected to curtail risk appetite among investors, leading to a more challenging environment for regional currencies.
As reported, the SGD is managing to hold near 90-day highs around 2.7837 against the AED, which marks a 1.9% increase over its three-month average of 2.7304. The SGD has traded within a relatively stable range of 4.0% over the past months, oscillating between 2.6778 and 2.7837. However, with the recent geopolitical developments and the potential for further U.S. tariff measures, market experts caution that this upward momentum could be unsustainable if the economic tension escalates.
The Monetary Authority of Singapore (MAS) has an essential role in managing the SGD's value against a basket of currencies, which provides some stability in times of uncertainty. Nevertheless, forecasts indicate a cautious approach moving forward, especially as other central banks in the region are already beginning to cut interest rates to stimulate growth in response to the souring global economic outlook.
Given that the AED's peg to the US dollar stabilizes its exchange rate movements, the flowing nature of the SGD will largely depend on the ongoing developments in trade policy and international relations. Experts will be closely monitoring the situation as a widening trade war could have cascading effects on the Singapore economy and further influence the SGD's direction against the AED in the coming months.
