Outlook
The SGD remains supported by resilient domestic growth and contained inflation, but external headwinds from US trade policy and global risk signals cap upside. A more accommodative MAS stance historically supports growth but can weigh on the currency if growth stays strong and inflation remains subdued.
Key drivers
- Policy stance: MAS shifted the policy band slope in January 2025 toward greater accommodation to support growth amid easing inflation.
- Economic performance: Singapore posted robust Q4 2024 growth of 5%, reinforcing SGD strength amid a resilient economy.
- Trade dynamics: The US tariff on Singapore imports, effective April 2025, adds pressure to Singapore’s export outlook and could temper SGD gains.
- Inflation trajectory: Core inflation was 0.8% year-on-year in January 2025, keeping inflation tame and allowing a continued accommodative policy posture.
Range
SGDUSD 0.7914, 1.7% above its 3-month average of 0.7779, having traded in a stable 3.8% range from 0.7644 to 0.7934
SGDEUR 0.6667, just above its 3-month average, having traded in a stable 1.6% range from 0.6593 to 0.6696
SGDGBP 0.5797, near its 3-month average, having traded in a very stable 2.3% range from 0.5730 to 0.5863
SGDJPY 120.8, 30-day lows near 120.8, just 0.5% below its 3-month average of 121.4, having traded in a very stable 4.0% range from 119.0 to 123.8
What could change it
- Policy shifts: Any change in MAS’s stance (tighter or more accommodative) would drive SGD direction.
- Trade developments: New tariffs or relief measures affecting Singapore’s exports could alter SGD momentum.
- Growth/inflation surprises: Unexpected acceleration or cooling in growth or inflation could prompt policy recalibration.
- Dollar and risk sentiment: Shifts in the US dollar path or global risk appetite can influence SGD cross-rates.
