SGD/HKD Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average and lacks a clear driver.
Key drivers:
- Rate gap: The Monetary Authority of Singapore's steady policy supports a stronger SGD compared to the Hong Kong Monetary Authority's interventions which have kept HKD at low levels.
- Risk/commodities: Concerns around global trade can pressure both currencies, but the SGD remains favored due to Singapore's resilient economic outlook.
- One macro factor: The MAS has revised its inflation forecasts upward for 2026, which should lend additional support to the SGD.
Range: Expect the SGD/HKD rate to hold within the recent range as both currencies navigate external pressures without significant new developments.
What could change it:
- Upside risk: Stronger-than-expected economic data from Singapore could push the SGD higher.
- Downside risk: Increased global trade tensions or further HKMA interventions might lead to a depreciation of the SGD against the HKD.
