The market bias for the SGD to USD exchange rate is bearish.
The expected decline of the USD is driven by three main factors: the anticipated interest rate cuts by the Federal Reserve, which could weaken the USD, particularly in 2026; the easing of monetary policy by the Monetary Authority of Singapore, indicating a supportive environment for the SGD; and the improvised growth outlook for Singapore, with forecasts suggesting a resilient recovery in economic performance.
In the near term, the SGD is likely to trade within a stable range given the recent price volatility, though slight changes may occur as conditions evolve.
Upside risks for the exchange rate could arise from stronger-than-expected economic recovery in the U.S. that may bolster the USD. On the downside, if the Federal Reserve implements more aggressive rate cuts than projected, it could lead to a sharper decline in the USD's value relative to the SGD.
