SGD/CHF Outlook:
Bearish, as the rate is below its recent average and near recent lows, influenced by external pressures on the Singapore economy.
Key drivers:
• Rate gap: The Monetary Authority of Singapore has adopted a more accommodative monetary policy, contrasting with the Swiss National Bank's potential to reintroduce negative interest rates to manage the strong Swiss Franc.
• Risk/commodities: Global uncertainties are pushing investors towards the Swiss Franc as a safe-haven currency, impacting the SGD negatively amid challenges in trade.
• One macro factor: The implementation of significant tariffs by the US on Singapore imports is likely to hurt Singapore's export performance, weakening the SGD.
Range:
Expect the SGD/CHF to drift lower within its recent range, continuing to test the lower end given current pressures.
What could change it:
• Upside risk: An unexpected improvement in Singapore's export performance could strengthen the SGD.
• Downside risk: Further deterioration in global market confidence or an escalation in US tariffs could push the SGD lower.
