SGD/MYR Outlook:
The SGD/MYR exchange rate is likely to decrease as it currently trades below its 90-day average and near recent lows. This is compounded by specific pressures from trade-related concerns affecting the Singaporean economy.
Key drivers:
- Rate gap: The Monetary Authority of Singapore's recent easing measures contrast with Bank Negara Malaysia’s stable monetary policy, impacting the SGD negatively against the MYR.
- Risk/commodities: With oil prices at highs and contributing significantly to Malaysia's economic performance, the MYR is supported amid this favorable commodity backdrop.
- Economic performance: Despite global uncertainties, Malaysia's construction sector has shown strong growth, bolstering the MYR's strength compared to the SGD.
Range:
Expect the SGD/MYR to hold steady within its recent trading range, though it may be pressured towards the lower end.
What could change it:
- Upside risk: A significant rebound in Singapore's economic indicators could boost the SGD.
- Downside risk: Continued trade tensions affecting Singapore's export sectors may further weaken the SGD against the MYR.
