The recent outlook for the Singapore dollar (SGD) against the Qatari riyal (QAR) suggests a stable yet cautious sentiment within the currency markets. In June, the SGD reached near decade highs, mainly attributed to persistent weakness in the US dollar amid expectations of Federal Reserve rate cuts and market concerns over trade tariffs. Analysts noted that the USD/SGD pair has been trading around the 1.27–1.28 range, its strongest performance yet, indicating significant support for the Singapore dollar.
Despite this strength, forecasters caution that appreciations may be limited without a decisive dovish turn from the Fed or substantial weakening of US economic data. The Monetary Authority of Singapore (MAS) has maintained its monetary policy stance, and the SGD's nominal effective exchange rate (S$NEER) appears to be hovering near the upper end of its targeted range. This position indicates that MAS is likely to intervene if the SGD exceeds certain thresholds.
Currently, the SGD to QAR exchange rate is trading near a 7-day high of approximately 2.8411, which is just above the three-month average. This range has remained fairly tight, demonstrating stability despite broader market fluctuations. On the other hand, the QAR's stability is not only influenced by the SGD but also by oil prices, which are under pressure. As of now, the price of Brent Crude oil is trading at $66.59 per barrel, marking a 2.6% decline from its three-month average and showcasing significant volatility within a 25.6% range.
The imposition of a 10% reciprocal tariff by the US on Singaporean goods could have varying impacts on trade relations, but analysts have noted that Singapore's strong trade ties with the US may mitigate more severe consequences. This dynamic underlines the importance of monitoring upcoming economic indicators, such as the July Federal Open Market Committee's decisions and the US CPI print, which will offer clearer insights into the future trajectory of these currencies.
In summary, while the SGD looks poised for stability against the QAR, external factors, particularly US economic policy shifts and oil market trends, will play crucial roles in shaping future exchange rate movements.
