SGD/CNY Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average and lacks a clear driver.
Key drivers:
- Rate gap: The Monetary Authority of Singapore's accommodative stance contrasts with the People's Bank of China's efforts to stabilize the yuan's value.
- Risk/commodities: With Brent Crude OIL/USD remaining stable, demand dynamics could play a role in influencing the Singapore dollar, given Singapore's oil trading scope.
- One macro factor: China's recent infrastructure spending has bolstered economic growth, supporting the yuan's strength, yet its effects are mixed amid global uncertainties.
Range:
SGD/CNY is expected to test the recent range, oscillating but not drastically deviating from current levels.
What could change it:
- Upside risk: A marked increase in Singapore's growth data could boost the SGD further.
- Downside risk: A significant downturn in Chinese economic indicators could undermine the yuan and impact the SGD/CNY rate.