The exchange rate forecast for AED to SGD is currently under influence from both geopolitical and economic developments in the respective regions. Analysts note that the SGD is facing downward pressure following the U.S. administration's tariffs on imports from Singapore, which are part of a broader trade conflict with China and other economies. The tariffs have led to a decline in regional currencies, with emerging Asian currencies reflecting increasing concern over further global trade tensions. This has resulted in a loss of optimism among investors, contributing to a weaker SGD.
On the other hand, the AED is experiencing its own challenges and opportunities. Recent geopolitical tensions in the Middle East, specifically Israel's military actions against Iran, have resulted in increased volatility and rising oil prices, which typically support the Dirham's strength. Additionally, forecasts from the Arab Monetary Fund indicating a robust 6.2% growth for the UAE economy in 2025 could instill confidence in the AED. However, the slowing growth of the non-oil private sector may dampen overall economic prospects and impact the AED's performance.
Regarding recent price movements, the AED to SGD rate is currently 0.3485, representing a minor decline of 0.6% compared to its three-month average of 0.3506. The exchange rate has remained relatively stable, trading within a range of 3.4% (0.3462 to 0.3579). This stability could suggest that market participants are currently weighing the impacts of ongoing economic indicators and geopolitical events rather than reacting aggressively to single data points.
As both the SGD and AED navigate through these complex environments, stakeholders are encouraged to monitor developments closely, as shifts in economic policies or unexpected geopolitical events could lead to increased volatility in exchange rates impacting international transactions.