SGD/HKD Outlook:
Slightly positive, but likely to move sideways as the rate is above the 90-day average and within a stable range. Current economic conditions in Singapore are supporting this position despite lack of clear drivers for significant movement.
Key drivers:
• Rate gap: Singapore's monetary policy is more accommodative compared to Hong Kong's stabilization efforts, giving the SGD an edge.
• Risk/commodities: Oil prices have been volatile, impacting global trade dynamics and indirectly affecting both currencies.
• One macro factor: Singapore's resilience with a GDP growth of 4.3% suggests economic strength, countering external trade tensions.
Range:
Expect the SGD/HKD to hold within the recent 3-month range, reflecting stability with minor fluctuations.
What could change it:
• Upside risk: Stronger-than-expected economic data from Singapore could boost the SGD further.
• Downside risk: Continued intervention by HKMA to support the HKD might pressure the SGD lower against the HKD.
