SGD/GBP Outlook:
Slightly weaker, but likely to move sideways as the rate is below its recent average and within a stable range.
Key drivers:
• Rate gap: The Monetary Authority of Singapore is pursuing an accommodative policy while the Bank of England is signaling a cautious approach with its recent interest rate decision.
• Risk/commodities: The Singapore dollar may face pressure as the US imposes tariffs on imports from Singapore, impacting trade dynamics.
• One macro factor: The Bank of England's anticipated rate cut has contributed to uncertainty regarding the pound's stability.
Range:
Expect the SGD/GBP exchange rate to hold within its recent 3-month range as it remains steady.
What could change it:
• Upside risk: A shift toward a more aggressive monetary policy by the Monetary Authority of Singapore could strengthen the SGD.
• Downside risk: Continued political uncertainty in the UK may lead to further GBP weakness, impacting the exchange rate.