In recent forecasts, analysts noted that the Singapore dollar (SGD) remained resilient, holding near decade highs against the US dollar (USD) in June. The SGD traded between 1.27 and 1.28 USD, reflecting a strong position that has persisted due to ongoing US dollar weakness. Factors contributing to this trend included expectations of future Federal Reserve (Fed) rate cuts, as well as concerns over US tariffs. Safe-haven demand and stable capital inflows into Asia also provided additional support for the SGD.
Forecasters suggest that further appreciation of the SGD may be limited unless clearer signals arise from the Fed or if market sentiment shifts substantially. The Monetary Authority of Singapore (MAS) recently indicated that the SGD nominal effective exchange rate (S$NEER) is positioned near the upper boundary of its managed band, implying that the MAS will likely defend this range against significant surges. Analysts anticipate that any breach of the 1.27 USD level could prompt intervention by the MAS.
In the context of the SGD/VND exchange rate, the recent trading data indicates that the SGD is valued at around 20,327 VND, slightly above its three-month average. This range has remained stable, fluctuating only 3.4% between 19,884 and 20,559 VND. As Singapore's economy is closely interlinked with the US, any changes in US economic data—especially related to inflation and Fed policy decisions—could directly influence the SGD/VND exchange rate moving forward.
Overall, with Singapore's significant trading relationship with the US and the stated tariffs, there could be mixed implications for the SGD alongside its Vietnamese counterpart. Stakeholders should keep a close watch on macroeconomic indicators and potential policy adjustments from the Fed for insights into future SGD performance against the VND.
