SGD/AED Outlook:
Slightly positive, but likely to move sideways. The SGD is trading above its 90-day average, though it lacks a strong current driver to push rates higher.
Key drivers:
• Rate gap: The Monetary Authority of Singapore has adopted a more accommodative stance, while the UAE Central Bank is aligning its rates with the US Federal Reserve, providing a stable backdrop for the AED.
• Risk/commodities: Oil prices have remained volatile, influencing the performance of currencies tied to oil revenue, including the AED.
• One macro factor: Singapore's GDP growth showed resilience, but trade tensions from U.S. tariffs could pressure the SGD.
Range:
The SGD/AED is likely to test the recent range, wavering between 2.8299 and 2.9143.
What could change it:
• Upside risk: A significant rebound in global trade could strengthen the SGD.
• Downside risk: Further escalation in U.S.-Singapore trade tensions may weaken the SGD.
