The USD to SGD market bias is currently bearish. The key drivers influencing this trend include the interest rate differential, as the Federal Reserve is expected to implement rate cuts that would weaken the U.S. dollar, while Singapore’s monetary policy remains steady amid robust economic growth. This divergence suggests potential weakness for the USD against the SGD.
Commodity prices and improving global economic growth might impact risk sentiment but are less immediate to the USD/SGD pair. In addition, Singapore's latest growth forecast was upgraded, which supports a stronger SGD outlook.
In the near term, the USD to SGD exchange rate could remain within a stable range, reflecting the recent price data that shows minimal variance from its three-month average.
Upside risks for the USD could arise from an unexpected stronger U.S. jobs report, which might alter perceptions about future rate cuts. Conversely, the anticipated ASEAN shift away from the dollar poses a significant downside risk, potentially exacerbating USD weakness.
