Bias: The USD/SGD pair is range-bound, as the current level is just below the 90-day average and near the middle of the 3-month range.
Key drivers:
• Rate gap: The US Federal Reserve is considering potential rate cuts in 2026, while the Monetary Authority of Singapore is maintaining a more accommodative stance, creating pressure on the SGD.
• Risk/commodities: Recent geopolitical tensions, notably U.S. airstrikes, may add uncertainty, impacting the USD positively in a volatile global environment.
• One macro factor: Singapore's economic growth is projected to moderate, reflecting resilience but also a cautious approach amidst fluctuating trade relations and tariff concerns.
Range: The USD/SGD is likely to hold its current position, with potential for gradual drifting as it tests the stability of recent price levels.
What could change it:
• Upside risk: A stronger-than-expected U.S. labor market report could bolster the USD further.
• Downside risk: A dovish tone from U.S. Federal Reserve officials could weaken the USD against the SGD.
