The SGD to USD exchange rate is currently bearish.
Key drivers include the interest rate differential, as the Federal Reserve is expected to cut rates further, which usually weakens the USD. The Monetary Authority of Singapore has kept its policy unchanged amid resilient economic growth, supporting the SGD. Meanwhile, strong economic forecasts for Singapore, driven by non-oil domestic exports, add to the SGD's strength.
In the near-term, the currency pair is expected to trade within a range influenced by the recent stability near 0.7770, slightly above the 3-month average of 0.7721.
An upside risk could stem from an unexpectedly strong performance in Singapore's manufacturing sector, while a downside risk may arise from escalating geopolitical tensions that could harm global risk sentiment.