SGD/TWD Outlook:
The SGD/TWD rate is currently above its 90-day average and near recent highs. This positions the pair for a bullish outlook as Singapore’s economy shows resilience despite external challenges.
Key drivers:
- Rate gap: The Monetary Authority of Singapore has adopted a more accommodative monetary policy, contrasting with Taiwan's stable policy rate of 2.00%.
- Risk/commodities: Oil prices remain above average, supporting the Singapore Dollar due to its economic ties with energy markets.
- Economic performance: Singapore's GDP growth remains robust, while Taiwan's export performance has also strengthened, especially in the technology sector.
Range:
The SGD/TWD is likely to drift within the recent 3-month range, testing the upper limit as demand for the Singapore Dollar remains firm.
What could change it:
- Upside risk: An unexpected acceleration in Singapore’s economic growth could boost the SGD further.
- Downside risk: A significant deterioration in trade relations with the U.S. may pressure the SGD against the TWD.
