The recent forecasts indicate a mixed outlook for the SGD to USD exchange rate, influenced by the dynamics of both currencies. The US dollar (USD) has recently slid due to a soft consumer price index (CPI) print, which revealed a drop in inflation from 3% to 2.7% in November. Analysts expect that this will prompt the Federal Reserve to implement aggressive rate cuts in 2026, creating downward pressure on the USD. With futures markets pricing in several cuts beginning as early as March, the relative yield advantage of the USD is diminishing, leading to a weaker dollar overall.
On the side of the Singapore dollar (SGD), the Monetary Authority of Singapore (MAS) eased monetary policy earlier this year to support economic growth amid lower inflation expectations. However, with Singapore’s economy showing stronger-than-anticipated growth of 2.9% year-on-year in the third quarter of 2025, the MAS has maintained its policy settings, which may provide some support to the SGD.
In current trading, the SGD to USD exchange rate stands at 7-day lows near 0.7732, hovering just above its 3-month average. It has remained stable within a 2.0% range, from 0.7644 to 0.7799. As such, analysts believe that if market sentiment remains strong and supportive for risk assets, the SGD could continue to hold its ground against the USD.
The outlook highlights that while the USD is weakening due to anticipated monetary easing, the SGD benefits from relatively robust economic performance, though external factors such as US trade tensions may still pose risks. As the markets await further economic data, particularly inflation reports, the SGD's trajectory against the USD remains uncertain but poised for potential fluctuation as conditions evolve.
