Forecasts for SGD to AED
Recent forecasts regarding the SGD to AED exchange rate indicate a cautious outlook amidst increasing geopolitical tensions and trade uncertainties. Analysts note that the recent implementation of a 10% tariff on Singapore imports by the U.S. threatens to dampen Singapore's economic growth, impacting the stability of the Singapore dollar (SGD). The broader sentiment in emerging Asian currencies has also turned negative, particularly following U.S. tariffs on China that suggest a possible escalation into a trade war, further discouraging risk appetite across the region.
As a result of these developments, the SGD has seen volatility, with recent data showing it has reached 90-day highs near 2.8263 against the UAE dirham (AED). This marks a significant increase of 2.6% above its three-month average of 2.7538, reflecting a robust performance by the SGD. Historical price movements indicate the SGD/AED trading has remained relatively stable, fluctuating within a 5.2% range from 2.6875 to 2.8263 over the past three months.
Experts emphasize the role of the Monetary Authority of Singapore (MAS) in managing the value of the SGD against a basket of currencies from Singapore's major trading partners. The MAS's proactive measures may offer some buffer against external shocks, particularly given Singapore's significant trade dependency, with the U.S. accounting for 15% of its total trade.
On the other hand, the UAE dirham remains stable due to its peg to the U.S. dollar, as seen across most Gulf Cooperation Council nations. Analysts underscore that, in this context, fluctuations in the AED against other currencies may be more influenced by changes in the USD rather than internal regional dynamics.
In summary, while the SGD has recently strengthened against the AED, challenges posed by global trade tensions may warrant careful monitoring for any shifts in the exchange rate, as both currencies navigate a complex geopolitical landscape.
