SGD/GBP Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and lacks a clear driving factor.
Key drivers:
• Rate gap: The Monetary Authority of Singapore's current monetary policy maintains the SGD's support, while the Bank of England seems firm on interest rates due to rising inflation concerns in the UK.
• Risk/commodities: Oil prices are stabilizing, which may limit volatility for the SGD, but do not provide significant upward pressure for either currency.
• One macro factor: The UK's better-than-expected retail sales and PMI numbers highlight economic resilience, which may bolster the GBP moving forward.
Range: The SGD/GBP exchange rate is expected to hold steady within its recent range, resisting significant movement.
What could change it:
• Upside risk: A shift in the Monetary Authority of Singapore's policy stance could strengthen the SGD.
• Downside risk: Political uncertainties in the UK, particularly surrounding local elections, could create volatility and pressure the GBP lower.