The Singapore dollar (SGD) has shown resilience in recent months, holding near decade highs against the US dollar amid broad weakening of the greenback. The exchange rate against the Qatari riyal (QAR) has been relatively stable, with SGD to QAR fluctuating within a tight range of 2.7884 to 2.8693, currently positioned at 2.8225, just below its three-month average. Analysts indicate that further significant appreciation of the SGD may be limited unless there are clear dovish signals from the Federal Reserve or notable weakness in US economic data.
The Federal Reserve's anticipation of potential rate cuts has influenced investor sentiment, leading to increased safe-haven demand for the SGD, particularly given the backdrop of trade tensions, including recent tariffs imposed by the US on Singaporean goods. While the Monetary Authority of Singapore (MAS) has maintained a prudent monetary policy stance, limiting SGD appreciation, it closely monitors the currency's performance against a basket of currencies. Markets expect MAS will defend the upper band of its nominal effective exchange rate, especially with USDSGD nearing critical support levels.
Looking forward, the trajectory of the SGD against the QAR may be affected both by domestic economic indicators and external factors, including oil prices, which have recently edged up. Current oil prices at 69.67 USD per barrel reflect a 2.5% increase above their three-month average, yet the volatility in oil, with a range of 60.14 to 78.85, suggests that fluctuations could impact the QAR due to its sensitivity to oil market dynamics. This interplay may influence cross-currency movements, including SGD to QAR, making it essential for stakeholders to monitor these developments closely in the coming months.