CAD/SGD Outlook:
Slightly positive, but likely to move sideways, given its position above the recent average and near recent highs.
Key drivers:
• Rate gap: The Bank of Canada is maintaining a cautious stance, in contrast to Singapore's accommodative monetary policy to stimulate growth.
• Risk/commodities: Oil prices are currently strong, trading well above average, which is beneficial for the Canadian dollar as it is a key oil exporter.
• Economic performance: Singapore's economy showed impressive growth, which has supported the strength of the Singapore dollar.
Range:
Expect CAD/SGD to hold within its recent trading range, given the lack of pressure on either currency.
What could change it:
• Upside risk: A significant rally in oil prices could further strengthen the CAD.
• Downside risk: Any weakening economic data from Canada could diminish support for the CAD.