SGD/HKD Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average yet lacks a clear driver.
Key drivers:
• Rate gap: The Monetary Authority of Singapore's recent accommodative policy contrasts with Hong Kong's interventions to maintain its currency peg, affecting their relative strength.
• Risk/commodities: Oil prices are stable, which typically supports the SGD and helps buffer the economic impacts on both currencies.
• One macro factor: Singapore's robust economic performance, marked by significant growth, continues to lend support to the SGD.
Range:
Expect the SGD/HKD rate to drift within its 3-month range, without drastic movements towards either extreme.
What could change it:
• Upside risk: A significant improvement in global trade relations could boost the SGD relative to the HKD.
• Downside risk: Further US tariffs on Singaporean goods may negatively impact the SGD.
