Recent forecasts for the SGD to THB exchange rate have been influenced by significant geopolitical developments, particularly the tariffs introduced by U.S. President Donald Trump. His announcement of a 10% tariff on imports from Singapore, alongside a much harsher 36% tariff on Thai goods, has negatively affected both currencies. Analysts have noted that the worsening outlook for emerging Asian currencies stems from rising fears of a global trade war, which has dampened risk appetite across the region.
Following these developments, the Thai baht and South Korean won have both faced declines of about 2%. The SGD, while also under pressure, managed to hold relatively stable—trading at 25.21, which is only 0.8% below its three-month average of 25.42. The past few months saw the SGD/THB pair oscillating within a modest range of 1.9%, between 25.18 and 25.67.
The Monetary Authority of Singapore places significant importance on the value of the SGD, managing it against a basket of currencies from major trading partners, which might provide some resilience despite the tariffs. Economists suggest that Singapore's solid trade relationship with the U.S. offers a buffer, potentially safeguarding the SGD compared to the THB.
Moreover, the performance of the Thai baht is also susceptible to fluctuations in oil prices, which have recently demonstrated volatility. The Brent Crude OIL/USD price, currently at 69.28, reflects an uptick of 2.9% above its three-month average, traversing a wide range of 31.1% from 60.14 to 78.85. As oil remains a key economic driver, any significant movements could further impact the baht's performance in the forex market.
In summary, both currencies face headwinds from international trade tensions, but the SGD may be slightly better positioned due to its economic ties with the U.S. However, continuous monitoring of trade policies and oil prices will be essential for making informed decisions regarding SGD to THB transactions in the near future.