SGD/VND Outlook:
Slightly positive, but likely to move sideways as the rate is near its 90-day average and positioned centrally within the recent range.
Key drivers:
• Rate gap: The Monetary Authority of Singapore's accommodative monetary policy contrasts with the potential for stability in the VND from recent interest rate cuts by the Federal Reserve.
• Risk/commodities: Current oil prices are stabilizing; lower oil prices typically benefit the Singapore economy, influencing SGD positively against VND.
• One macro factor: Singapore's Q4 2024 economic growth outperformed expectations, supporting the SGD despite external pressures like U.S. tariffs on Singaporean goods.
Range:
The SGD/VND is likely to maintain its position within the established range, reflecting limited volatility in the near term.
What could change it:
• Upside risk: An unexpected strengthening of the SGD due to further economic growth news in Singapore could push the rate higher.
• Downside risk: New developments related to the upcoming legislative elections in Vietnam might create uncertainty, potentially weakening the VND against the SGD.
