Bias: The SGD/USD is bullish-to-range-bound, as it sits slightly above the 90-day average and within the upper half of its 3-month range.
Key drivers:
- Rate gap: The Monetary Authority of Singapore is adopting a more accommodative monetary policy, while the Federal Reserve is expected to implement interest rate cuts, supporting the USD.
- Risk/commodities: Recent trends in oil prices have been stable; any sharp fluctuations could impact the SGD, given its economic connections to commodities.
- Economic growth outlook: Singapore's GDP growth is expected to moderate, which could limit SGD strength against the USD.
Range: The SGD/USD is likely to hold within its recent 3-month range, showing stability as external factors play out.
What could change it:
- Upside risk: Strong U.S. job growth or surprising Federal Reserve comments supporting dollar strength could push the SGD lower.
- Downside risk: A shift towards stronger inflation data from Singapore might bolster the SGD against the USD.
