In Focus
ECONOMY, FINANCIAL SERVICES | Staff Reporter, Singapore

Singapore dollar rally to continue through rest of 2020: Fitch

It is forecast to reach as high as S$1.37/USD in 2021.

The Singapore dollar is expected to finish 2020 on a stronger note and continue its rally through 2021 on the back of continued uncertainty in the US and a bullish technical outlook, reports Fitch Solutions.

The analysis and macro-insights firm has revised its forecast to S$1.385 to a US dollar (S$1.385/USD), from S$1.395/USD previously.

Their 2021 forecast has also been adjusted to S$1.37/USD from S$1.38/USD.

Over the short term, Fitch says that it sees more room for the SGD to rally given a bullish technical outlook and the contrasting situations in the US and Singapore.

“Amidst heightened uncertainty pre-elections, the US struggles to contain the COVID-19 outbreak whilst Singapore is already preparing to enter the next phase of economic re-opening with a near-zero caseload of COVID-19,” they further noted.

Fitch also expects a slight appreciation in the SGD in the long-term, especially given that the economy is likely to continue to pick up over the coming quarters.

“From a domestic perspective, the outbreak will likely to remain contained with the government’s cautious approach to re-opening, which should propel domestic demand. Externally, the ongoing recovery in the wider Asia region, in particular, the V-shaped recovery in China, is likely to gather strength over the coming quarters and further boost Singapore’s exports and in turn, the SGD,” the report added.

A global vaccine rollout in 2021 and 2022 will also revive international travel and offers a boon to Singapore’s economy, given that Changi Airport is an international and regional hub, and this would boost the SGD.

Fitch also expects the Singapore dollar to remain largely steady as the monetary policy is likely to remain on hold.

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.