SGD/PKR Outlook:
Slightly positive, but likely to move sideways as the SGD is currently above its recent average, yet lacks a clear driver for an uptrend.
Key drivers:
• Rate gap: The Monetary Authority of Singapore's accommodative policy contrasts with the tough situation facing the State Bank of Pakistan amidst inflation and geopolitical issues.
• Risk/commodities: Oil prices have remained volatile, which tends to impact both currencies, yet current trends are not strong enough to push for a significant move.
• One macro factor: Pakistan's ongoing high inflation, expected to be around 6%, poses downward pressure on the PKR, creating uncertainty in trading dynamics.
Range:
SGD/PKR is likely to hold steady, drifting within its recent range, as currently there's limited momentum.
What could change it:
• Upside risk: Strong economic data from Singapore could improve demand for the SGD.
• Downside risk: Continued geopolitical tensions in Pakistan may further weaken the PKR against the SGD.
