SGD/INR Outlook:
The SGD is currently trading above its recent average and is near recent highs, indicating a bullish outlook. This trend is likely supported by ongoing economic stability in Singapore.
Key drivers:
- Rate gap: The Monetary Authority of Singapore has maintained a cautious approach while the Reserve Bank of India has allowed the INR to depreciate, widening the gap between the two currencies.
- Risk/commodities: With recent stability in oil prices, the SGD remains supported against currencies like the INR, which is more susceptible to geopolitical tensions.
- One macro factor: The recent trade agreement between the US and India has boosted Indian exports, yet uncertainty remains due to other underlying economic issues.
Range:
The SGD/INR is expected to test extremes within its recent range as it continues to remain strong.
What could change it:
- Upside risk: Any further positive developments in Singapore's economic policy could strengthen the SGD.
- Downside risk: Escalating geopolitical tensions could place downward pressure on the INR.