SGD/CNY Outlook:
The SGD/CNY exchange rate is likely to move sideways as it sits near its recent average and is trading within a stable range. Economic conditions in both Singapore and China do not currently suggest sharp movements in either direction.
Key drivers:
• Rate gap: The Monetary Authority of Singapore has eased policy to support growth, while the People's Bank of China is focused on yuan stability, creating a mixed impact.
• Risk/commodities: Global oil prices have been relatively stable, influencing trade conditions, but not strongly affecting the SGD or CNY.
• One macro factor: China's recent GDP growth exceeded expectations, reinforcing the yuan’s resilience, which adds pressure for SGD strength against it.
Range:
Expect the SGD/CNY to hold steady within its recent 3-month range, as there are no strong catalysts for an imminent breakout in either direction.
What could change it:
• Upside risk: An unexpected increase in Singapore's exports could boost the SGD.
• Downside risk: Continued trade tensions or new tariffs could weaken the SGD versus the CNY.
