The SGD to INR exchange rate has been positioned at 7-day highs near 67.06, reflecting a 1.1% increase above its 3-month average of 66.35. Recent price data shows the SGD has fluctuated within a 4.4% range, trading between 64.54 and 67.39, indicating some stability amid external market pressures.
Analysts are expressing concern over the recent trade policy announcements from U.S. President Donald Trump, which have significantly impacted sentiment in emerging Asian currencies, including both the Singapore dollar (SGD) and Indian rupee (INR). The announcement of a 10% tariff on Singapore imports is seen as a factor contributing to uncertainty and volatility in the currency market. While Singapore's strong economic ties with the U.S. may mitigate some of the tariff impacts, the broader regional environment is deteriorating as trade tensions escalate.
For the Indian rupee, mixed influences are being observed. The rupee is reacting to Trump's tariffs, which have led to a decline in the dollar amid growth concerns in the U.S. While local currency traders are noting that the rupee's risks appear broadly balanced, the ongoing geopolitical tensions, particularly with rising energy prices linked to ongoing rises in crude oil costs, are raising inflationary pressures that could fuel further depreciation.
Economic experts are cautious about the outlook for both currencies in light of potential global trade disruptions. The heightened volatility reflects not only U.S. policy but ongoing regional dynamics, including conflicts that threaten stability. Investors are currently shedding Asian currencies against a surging dollar, a trend that could continue if tariff escalations remain prevalent.
Overall, with the SGD positioned strong against recent averages and the INR grappling with external pressures, market participants should stay vigilant to both policy shifts and economic indicators that could inform further currency movements.