The SGD to AED exchange rate demonstrates a range-bound market bias.
Key drivers include the interest rate differential, where Singapore's Monetary Authority has eased policy, making the SGD less attractive for investors. Concurrently, the UAE Central Bank is forecasting strong economic growth, expected to propel the AED. Additionally, Singapore's robust GDP growth forecast supports the SGD, although easing monetary policy may limit its appreciation.
In the near term, the SGD to AED is expected to trade within a stable range, reflecting minor fluctuations just above its three-month average. Recent trading showed the SGD at 2.8570, highlighting continued stability.
Upside risks to the SGD include potential stronger-than-expected exports or a tightening in monetary policy by the MAS. Conversely, a downturn in global markets or slower growth projections could weigh down the SGD's performance against the AED.
