SGD/SAR Outlook:
Slightly positive, but likely to move sideways, as the rate is above the recent average without a clear driver.
Key drivers:
- Rate gap: The Monetary Authority of Singapore's recent accommodative policy contrasts with Saudi Arabia’s fixed exchange rate to the US dollar, providing some support to the SGD.
- Risk/commodities: Oil prices are currently stable; fluctuations in this commodity influence the SAR since it is closely linked to oil revenues.
- One macro factor: Singapore's economy showed strong growth in Q4 2024, which has helped bolster confidence in the SGD.
Range:
Expect the SGD/SAR to hover around its current level, with movements likely being limited within the established range.
What could change it:
- Upside risk: A significant recovery in global trade could boost demand for the SGD.
- Downside risk: Further US trade tariffs on Singaporean goods could negatively impact the SGD.