Bias
Neutral to slightly softer versus the USD in the near term, as MAS’s accommodative stance persists and global rate differentials stay supportive of USD. SGD is expected to stay within a tight range given Singapore’s resilient growth and policy credibility.
Key drivers
- MAS policy trajectory and inflation path: The January 2025 shift to a more accommodative policy band, with core inflation forecast trimmed to 0.5%–1.5% for 2025, supports a softer SGD backdrop even as growth stabilises into 2026. Markets note policy remains cautious in the face of tariff risks.
- Growth and trade backdrop: Singapore’s economy is projected to grow near trend in 2026, underpinning SGD resilience even as external headwinds persist.
- Domestic and global risk factors: Tariff risks and global trade tensions keep policy cautious, limiting sharp SGD moves but leaving room for modest USD strength if external conditions worsen.
- Recent price action context: SGD has traded in a very stable range across major pairs, with current levels near long-run averages and within established bands (see Range for specifics).
Range
SGD/USD: current 0.7771; 3-month average 0.7726; range 0.7644–0.7811.
SGD/EUR: current 0.6686; 3-month average 0.6637; range 0.6593–0.6696.
SGD/GBP: current 0.5799; 3-month average near; range 0.5756–0.5873.
SGD/JPY: current 122.4; 3-month average 120.3; range 116.5–123.5 (7-day low around 122.4).
What could change it
- MAS policy shift: a surprise tightening or a less accommodative stance could lift the SGD and push rates higher across the pairings.
- Inflation or growth surprises: unexpectedly stronger domestic inflation or faster growth could alter the policy path and SGD direction.
- U.S. policy and tariff developments: sharper shifts in U.S. tariffs or Fed rate expectations could alter risk appetite and USD strength, affecting SGD cross-rates.
- Global risk sentiment: a sustained risk-on or risk-off phase can tilt SGD versus other currencies even within the current range.
