SGD/GBP Outlook: Likely to decrease, as the rate is near its recent lows and pressured by ongoing economic concerns in the UK.
Key drivers:
• Rate gap: The Monetary Authority of Singapore has shifted to a more accommodative policy stance, while the Bank of England is expected to implement further rate cuts, widening the policy divergence.
• Risk/commodities: Global trade tensions, especially regarding U.S. tariffs, have put significant pressure on the UK economy, which affects the GBP negatively.
• One macro factor: The UK's GDP growth is anticipated to slow significantly, suggesting underlying weaknesses that could further impact GBP demand.
Range: SGD/GBP is likely to hold within its recent stable range.
What could change it:
• Upside risk: A positive shift in global trade dynamics could bolster the GBP.
• Downside risk: Continued concerns regarding UK economic performance may push the rate lower.
