Bias: The outlook for SGD/CHF is bullish-to-range-bound, as it is currently above the 90-day average and sits within the upper half of the 3-month range.
Key drivers:
• Rate gap: The Monetary Authority of Singapore recently eased its monetary policy, while the Swiss National Bank has maintained a zero percent policy rate, creating a favorable environment for SGD to strengthen.
• Risk/commodities: Current oil prices are somewhat stable, helping support Singapore’s economic resilience and shielding the SGD from significant pressures.
• Macro factor: The easing of inflation expectations by MAS suggests a more flexible monetary policy, which may enhance growth potential for SGD.
Range: The SGD/CHF pair is likely to drift within its recent range, reflecting stable trading patterns without significant volatility.
What could change it:
• Upside risk: A stronger-than-expected recovery in Singapore's economy could lead to further SGD strength.
• Downside risk: Continued appreciation of the CHF due to geopolitical tensions or trade issues could dampen SGD performance.
