SGD to USD Exchange Rate Strengthens Following U.S.-India Trade Deal

The Singapore dollar has gained ground against its U.S. counterpart, with the SGD/USD currency pair reflecting improved market sentiment sparked by the recent trade agreement between the United States and India. President Donald Trump announced that the U.S. has agreed to reduce tariffs on Indian goods to 18%, a significant drop from the previous 25% rate. This tariff reduction has eased trade tensions, supporting broader risk appetite in financial markets and benefiting regional currencies like the Singapore dollar.

Market Reaction to Trade Sentiment

The uptick in the Singapore dollar represents a broader shift in risk sentiment across Asian markets. According to LSEG data, the U.S. dollar declined 0.1% against the Singapore dollar, with the SGD/USD pair trading at 1.2710. This movement reflects investors’ reduced appetite for defensive positions as market confidence improves. The tariff relief on Indian exports has particularly boosted sentiment in the region, encouraging capital flows into higher-yielding assets and weaker major currencies like the U.S. dollar.

OCBC Strategists Forecast SGD to USD Consolidation

Analysts from OCBC Bank’s research team have weighed in on the near-term outlook for the Singapore dollar exchange rate. They predict that if risk sentiment remains stable and the upward pressure on the U.S. dollar subsides, the SGD/USD pair may consolidate within a defined trading band. The strategists identified key technical levels at 1.2680 on the lower end and 1.2760 on the upper end, suggesting limited directional movement in the near term. This consolidation range reflects a delicate balance between supporting factors like the India trade deal and broader U.S. dollar strength.

Looking Ahead

The path forward for SGD/USD largely hinges on the sustainability of the current risk-on environment. As long as trade optimism remains intact and the U.S. dollar’s rally loses momentum, the Singapore dollar is likely to maintain its recent gains within the predicted consolidation zone. Market participants should monitor any developments in U.S.-India trade relations and broader macroeconomic indicators that could shift the currency pair’s trajectory.