The recent outlook for the SGD to THB exchange rate reflects a mix of influences stemming from broader market conditions and specific regional developments. Currently, the SGD is near decade highs due to persistent US dollar weakness, but analysts suggest that significant further appreciation may be limited without decisive signals from the Federal Reserve or a notable shift in market sentiment. The current trading range for SGD against the THB has encountered resistance, trading at 90-day lows near 25.01, which is notably 1.5% below its three-month average of 25.38.
As the Monetary Authority of Singapore (MAS) has maintained a stable approach toward managing SGD against a basket of currencies, the lack of major policy shifts following an April decision has led to speculation regarding further appreciation potential. The MAS is expected to defend the upper boundaries of the currency band, particularly given recent economic indicators, including a minor easing in core inflation and a downgrade of Singapore's full-year GDP growth forecast.
Conversely, the Thai baht has faced pressures, attributed partly to the imposition of a 36% tariff from the US, which has exacerbated the concerns regarding a global trade war. Recent reports indicate that regional currencies, including the THB, have weakened, sliding approximately 2%. As both countries navigate these tariff changes, the sentiment in the emerging Asian currency markets has deteriorated, impacting overall risk appetite.
Additionally, the fluctuations in Brent Crude OIL/USD prices, which are currently trading at 69.67 and are 2.5% above the three-month average, reflect significant volatility. Given the interconnected nature of oil prices and currency strength in Thailand, ongoing price changes in oil may influence the THB's performance moving forward.
In summary, while the SGD remains robust against the backdrop of US dollar weakness, the THB's outlook appears more precarious amid rising tariffs and global trade tension. Market participants should remain attentive to upcoming economic data releases and policy announcements that could influence the SGD/THB exchange rate in the near term.
