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 policy contrasts with the People's Bank of China's commitment to stabilize the yuan, which may limit SGD gains.
• Risk/commodities: Oil prices have shown volatility recently, which can impact trade balances and affect both currencies.
• Economic growth outlook: Both Singapore and China are expected to experience modest growth, but factors like trade tensions and inflation controls could influence currency performance.
Range: The SGD/CNY is likely to hold its position within the current 3-month range as there are no strong movements expected.
What could change it:
• Upside risk: Stronger-than-expected economic data from Singapore could lead to SGD appreciation.
• Downside risk: Increased global trade tensions negatively impacting China's economy could exert pressure on the CNY.
