Forecasts for SGD to THB
The exchange rate forecast for the Singapore Dollar (SGD) against the Thai Baht (THB) is under pressure due to recent geopolitical developments and economic conditions impacting both currencies. Analysts indicate that the announcement of a 10% tariff on imports from Singapore by U.S. President Donald Trump adds a layer of uncertainty that is negatively affecting the outlook for emerging Asian currencies. With the U.S. as Singapore's largest trading partner, currency dynamics could be significantly influenced as the trade landscape shifts.
In the past week, the SGD to THB exchange rate has experienced volatility, with current trading at 25.50, which is slightly elevated at 1.0% above its three-month average of 25.26. The rate has remained stable within a 3.9% range, reflecting some resilience amidst wider economic challenges. However, fears of a global trade war, compounded by the escalating tariffs on Thailand—where the U.S. has imposed a far harsher 36% reciprocal tariff—have adversely impacted risk appetite across the region. The Thai Baht has seen a notable slide, matching the decline of other currencies in the area.
The Monetary Authority of Singapore closely manages the SGD against a basket of currencies, which may buffer some of the adverse impacts seen from the trade war. However, the broader environment remains challenging, with a confluence of external pressures. Economists note that as regional central banks, including those in Thailand, cut interest rates to spur growth, competitive devaluation may further complicate the SGD/THB outlook.
Additionally, fluctuations in oil prices play a significant role, especially for the Thai economy. Currently, oil prices are trading at $66.87 per barrel, which is about 6.8% below the three-month average of $71.74. This volatility, with prices swinging in a 27.5% range from $61.58 to $78.50, is likely to strain the Thai Baht further, given Thailand's reliance on energy imports.
In conclusion, while the SGD maintains a slight advantage against the THB, the overall prognosis for both currencies is clouded by rising geopolitical tensions and economic headwinds, leading forecasters to suggest caution in currency exposure moving forward.
