The SGD to TWD exchange rate has been exhibiting stability, currently trading at approximately 23.27, which is near 60-day highs and reflects a slight increase of 0.8% over its three-month average of 23.07. This rate has been contained within a narrow range of 22.69 to 23.40, suggesting a period of relative calm amid broader market fluctuations.
Analysts note that the Singapore dollar (SGD) has maintained strength due to a combination of US dollar weakness and strong sentiment toward Singapore’s economy. While the SGD has reached decade highs, future appreciation may be limited unless the Federal Reserve adopts a markedly dovish stance. Key economic indicators such as US consumer price index data and decisions from the upcoming Federal Open Market Committee meeting will be pivotal in shaping market expectations.
On the contrary, the Taiwan dollar (TWD) faces challenges from a significant 32% tariff imposed by the US, part of the ongoing trade dynamics under the prior administration. In addition to trade tensions, the TWD is sensitive to global technological shifts and geopolitical risks, particularly relating to China's posture toward Taiwan. This environment could exert downward pressure on the TWD moving forward.
Economists suggest that the interaction between the SGD and TWD will largely depend on how each currency reacts to external pressures, particularly from the US economic landscape. Despite the SGD's recent buoyancy, if the Fed's monetary stance shifts, or if geopolitical tensions escalate, significant volatility could ensue for the SGD/TWD exchange rate.
In summary, while the SGD enjoys robust demand and stability, the TWD's vulnerabilities could limit its performance in the near term. Observers are advised to stay attuned to upcoming economic data and geopolitical developments that will influence these currencies’ trajectories in the coming weeks.
