SGD/TWD Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average and near mid-range levels.
Key drivers:
• Rate gap: The Monetary Authority of Singapore has adopted a more accommodative stance, while Taiwan's Central Bank remains non-interventionist, supporting the SGD against TWD.
• Risk/commodities: Recent oil price stability may influence trade balances, affecting both currencies but not significantly at present.
• One macro factor: Stronger-than-expected economic growth in Singapore has bolstered the SGD, while concerns about the TWD's strength impacting export sectors linger.
Range:
SGD/TWD is likely to hold within its recent range, reflecting ongoing stability without extreme fluctuations.
What could change it:
• Upside risk: A rebound in global trade could boost SGD further as exports improve.
• Downside risk: Continued volatility in the TWD, driven by external economic pressures, could create downward pressure on the SGD.
