SGD/USD Outlook: Likely to increase, supported by strong performance above its recent average and near recent highs.
Key drivers:
• Rate gap: The Monetary Authority of Singapore has shifted to a more accommodative monetary policy, while U.S. Federal Reserve rate expectations suggest a potential easing ahead.
• Risk/commodities: Oil prices remain stable, with no recent fluctuations that significantly impact the USD or SGD.
• One macro factor: Singapore’s GDP growth outlook remains resilient, even amidst global trade tensions, indicating solid economic performance.
Range: The SGD/USD is likely to test recent highs while remaining within its recent range.
What could change it:
• Upside risk: Stronger-than-expected U.S. inflation data could lead to a temporary boost for the USD against the SGD.
• Downside risk: Renewed geopolitical tensions involving the U.S. or unfavorable economic indicators from Singapore could pressure the SGD.
