USD/SGD Outlook:
The USD/SGD rate is likely to decrease as it trades below the 90-day average and near recent lows, driven by concerns over US economic performance.
Key drivers:
• Rate gap: The Federal Reserve maintains a cautious approach on interest rates, while the Monetary Authority of Singapore may support the SGD through more aggressive measures.
• Risk/commodities: Current fluctuations in global oil prices are impacting investor confidence in the USD, making the SGD comparatively more appealing.
• One macro factor: Recent data showed a significant decline in US GDP growth, raising alarm about the strength of the USD.
Range:
The USD/SGD is expected to drift within its recent range, with pressures likely to lead towards the lower end.
What could change it:
• An upside risk could come from stronger-than-expected employment data in the US, which might boost the USD.
• A downside risk could arise if Singapore's economic performance continues to show resilience, further supporting the SGD.