SGD/GBP Outlook:
Slightly positive, but likely to move sideways as SGD trades near its 90-day average and lacks a strong current driver.
Key drivers:
• Rate gap: The Monetary Authority of Singapore (MAS) has taken a more accommodative approach with its monetary policy, while the Bank of England (BoE) has maintained steady rates, diverging in strategies.
• Risk/commodities: Oil prices have been stable, which generally supports SGD through its economic ties to commodities but has created uncertainty for GBP due to its dependence on global market stability.
• One macro factor: Recent figures show that despite the UK's retail sales growth, the economic outlook is mixed with inflation concerns and potential rate cuts dampening confidence in GBP.
Range:
Expect SGD/GBP to hold within its recent range as it lacks clear drivers for strong movement in either direction.
What could change it:
• Upside risk: A stronger-than-expected UK GDP report could lift GBP, enhancing its attractiveness.
• Downside risk: An escalation in political uncertainty surrounding the UK could put additional pressure on GBP, causing further weakness.
