SGD/CNY Outlook:
Slightly positive, but likely to move sideways as the SGD is just below its recent average, placing it near the mid-range of the last three months.
Key drivers:
• Rate gap: The Monetary Authority of Singapore has adopted a more accommodative policy, while the People's Bank of China is focused on stabilizing the yuan.
• Risk/commodities: Recent trends show the yuan strengthening against the dollar, which could draw attention to the SGD, particularly if commodity prices remain volatile.
• One macro factor: China's economy has shown surprising resilience, with growth rates exceeding expectations amid ongoing government stimulus.
Range:
The SGD/CNY is likely to drift within its 3-month range, testing the lower and upper extremes occasionally.
What could change it:
• Upside risk: A significant improvement in the global economic outlook could support the SGD against the yuan.
• Downside risk: Further tariff escalations between the U.S. and Singapore, impacting trade, might weaken the SGD.
