The exchange rate forecast for the Singapore Dollar (SGD) against the Australian Dollar (AUD) reflects a complex interplay of recent economic developments and market sentiment.
Recent insights suggest that the AUD has been undergoing significant volatility, largely driven by fluctuations in risk appetite in global markets. Despite initial challenges, including a mixed trading day characterized by profit-taking and a deteriorating market mood, the AUD managed to recover as optimism returned. Analysts indicate this trend of recovery may continue if risk dynamics favor the AUD, particularly in the absence of significant Australian economic data.
On the other hand, the SGD is being influenced by the Monetary Authority of Singapore's (MAS) decision to maintain its current monetary policy, which has stabilized the currency amid easing global trade tensions. Economic growth has been positive, with a 1.4% GDP increase in Q2 2025, but concerns linger about potential slowdowns in the coming period. Core inflation figures dropping significantly provide MAS with leeway to uphold its policy, although economists remain divided on future moves.
Given that the SGD to AUD exchange rate recently hit a 90-day low of approximately 1.1703, which is 2% below its three-month average of 1.1945, the SGD is currently undervalued against the AUD. This scenario reflects a broader trend where AUD is affected by commodity prices and investor sentiment, particularly as it is viewed as a risk-on currency. Should global market stability return and demand for Australian exports, such as those stimulated by Chinese economic performance, increase, the AUD could strengthen further.
Market analysts expect the SGD is unlikely to strengthen significantly in the short term without further positive economic indicators or shifts in monetary policy that might provide support for the SGD against the AUD. Individuals and businesses involved in international transactions should consider these factors closely to optimize their currency exchange strategies.
