The Hong Kong dollar (HKD) remains under pressure as analysts highlight ongoing challenges stemming from rate differentials and economic sentiment. In June 2025, USDHKD was trading at the top of its pegged range, reflecting significant outflows and a strong appeal for carry trades. HKMA Chief Executive Eddie Yue noted that the demand for HKD weakened after corporate dividend payments and conversions related to IPOs. With the current overnight interest rate gap between the US and Hong Kong at 4.4%, the likelihood of continued HKD softness persists unless there is a shift in Federal Reserve policy. The currency has recently touched the 7.85 peg limit for the first time since 2023, and forecasts suggest it may remain near this upper band unless global sentiments improve significantly.
Meanwhile, the Singapore dollar (SGD) has shown resilience, trading at decade highs amid broader US dollar weakness. USD-SGD hovered around 1.27–1.28, reflecting strong safe-haven demand and stable capital inflows into Asia. Market expectations regarding potential Fed rate cuts have further supported the SGD's strength, despite some downside risks due to domestic economic concerns such as a downgrade in the GDP growth forecast to 0–2%. Analysts indicate that while the Singapore dollar is currently near the upper end of its managed band, significant SGD appreciation may be limited without more decisive dovish signals from the Fed.
In the context of the HKD to SGD exchange rate, the recent trading data indicates that HKD to SGD is stable around 0.1643, which aligns with its three-month average. This stability reflects a relatively narrow trading range of 3.5% between 0.1620 to 0.1677. As market forecasts suggest ongoing pressures on the HKD, any potential adjustments in monetary policies or significant shifts in global sentiment could impact this exchange rate moving forward.
Overall, forecasters highlight that while the SGD appears poised to maintain its strength, the HKD's outlook leans towards continued softness, necessitating careful consideration for those managing international transactions between these two currencies.