What are SGD to USD forecasts?
According to recent forecasts by FX analysts, the SGD to USD exchange rate is expected to trade between 1.3150 and 1.3450 in May. The performance of the SGD will depend on rate hikes and local economic performance, including inflation and retail sales data. Although the Monetary Authority of Singapore (MAS) recently announced that they will maintain the prevailing rate of appreciation of the SGD nominal effective exchange rate (S$NEER) policy band, the slightly dovish change in language did not help the SGD. However, if the US Fed maintains its current rate hold for the next few months, it is possible to see the SGD gaining some strength back.
On the other hand, the USD made modest gains recently as a result of bearish market sentiment and increased safe-haven appeal amid increasing economic tensions between China and the US. However, tonight’s PMIs from S&P Global could dampen USD demand, given economists' expectations of weaker services reading and forecasts that factory activity is likely to stall. Additionally, economists expect the US dollar's strength over the past year to eventually reverse in 2023 as the Fed's interest rate hikes cycle finally comes to an end.
Despite trading in a stable 2.5% range for the past three months, the SGD to USD exchange rate is currently at 90-day lows near 0.7381, which is 1.3% below its three-month average of 0.7476. It is important to note that Singapore's currency is of special importance to MAS, which manages the SGD value against a basket of currencies from the country's major trading partners. Therefore, any changes in the SGD-USD exchange rate will have significant implications for businesses and individuals engaged in international transactions.