SGD/VND Outlook:
The SGD/VND is slightly positive and likely to move sideways as the rate is just above its 90-day average and within the mid-range of its recent trading pattern.
Key drivers:
- Rate gap: The Monetary Authority of Singapore’s recent accommodative stance contrasts with the State Bank of Vietnam facing liquidity pressures, impacting the SGD/VND dynamics.
- Risk/commodities: Falling oil prices have led to a more stable commodity outlook, which supports the SGD while the VND faces pressures from rising import demands.
- One macro factor: The U.S. Federal Reserve's recent interest rate cuts have weakened the USD, providing modest support to the VND.
Range:
The SGD/VND is likely to drift within its recent range of 20,313 to 20,736, maintaining current levels.
What could change it:
- Upside risk: A significant reduction in the tariff on Singapore goods could improve SGD demand.
- Downside risk: A worsening liquidity situation in Vietnam's banking system could weaken the VND further.
