The USD to SGD exchange rate is currently bearish, with expectations for the USD to weaken in the coming months.
Key drivers include:
- The Federal Reserve is projected to implement three interest rate cuts by mid-2026, contributing to a softer USD.
- Positive sentiment about global economic growth, particularly in Asia, is likely to strengthen the SGD.
- Singapore’s economic growth forecast has recently been raised, reflecting strong performance in non-oil domestic exports and manufacturing.
In the near term, the USD to SGD is expected to trade within a stable range, potentially influenced by upcoming monetary policy decisions.
An upside risk could arise if global inflation unexpectedly pressures the Federal Reserve to halt its rate cuts, while a downside risk may be introduced if ASEAN's shift away from the USD accelerates, potentially reducing demand for the dollar in regional transactions.