SGD/MYR Outlook:
Bearish, as the rate is significantly below its recent average and near recent lows.
Key drivers:
• Rate gap: The Monetary Authority of Singapore's shift to a more accommodative policy contrasts with the US Federal Reserve's recent cuts, which has supported the MYR.
• Risk/commodities: With oil prices experiencing high volatility at recent highs, this could impact Malaysia's export revenues and the MYR positively.
• One macro factor: Singapore's economy showed strong growth recently, but tariffs imposed by the US on Singaporean goods may dent export performance.
Range:
SGD/MYR is likely to hold within the stable range it has traded in recently, with limited upward movement expected.
What could change it:
• Upside risk: A significant improvement in global trade relations could boost the SGD.
• Downside risk: Further deterioration of trade conditions or additional tariffs could weaken the SGD against the MYR.
