Outlook
The SGD is likely to stay in a narrow range in the near term as MAS’s accommodative stance and a softer inflation path support Singapore’s growth trajectory in 2026. The currency is broadly stable versus most majors, with mild upside bias against the USD and stronger performance vs JPY on a short-term basis. If U.S. tariff risks ease and global demand holds up, the SGD could edge toward the upper end of recent ranges; if USD strength resumes and risk sentiment worsens, a move toward the lower end remains possible.
Key drivers
- MAS policy adjustments: January 2025 saw the slope of the policy band reduced, signaling a shift toward a more accommodative stance. Core inflation forecasts were trimmed, helping the growth outlook to stabilise.
- Inflation and growth outlook: A softer core inflation profile supports a more moderate path for pricing pressures, with 2026 growth expected to run near trend.
- Trade/tariff environment: Ongoing U.S. tariff risks continue to weigh on global trade dynamics, affecting export and manufacturing outlooks for Singapore.
- Economic resilience: Singapore’s economy has shown resilience amid global tensions, important for maintaining SGD stability.
- Market tone: A combination of domestic policy impulse and external risk sentiment continues to shape the SGD’s drift versus key peers.
Range
SGD/USD 0.7644-0.7811 (current 0.7780, 0.7% above its 3-month average of 0.7729)
SGD/EUR 0.6593-0.6696 (current 0.6663, just above its 3-month average)
SGD/GBP 0.5756-0.5873 (current 0.5797, near its 3-month average)
SGD/JPY 117.4-123.5 (current 123.3, 2.3% above its 3-month average of 120.5)
What could change it
- A sharper or more prolonged shift in MAS policy or inflation momentum, either fueling further accommodation or prompting tightening.
- Resolution or escalation of U.S. tariff disputes altering global trade and risk sentiment.
- Significant surprises in Singapore’s domestic data (growth, inflation) or external demand conditions.
- Shifts in global USD trends or risk appetite impacting cross-asset correlations and the SGD’s relative strength.
