Singapore Currency Gains Ground on Market Sentiment Shift Following U.S.-India Trade Deal

The Singapore currency has appreciated against its U.S. counterpart recently, buoyed by a more optimistic market backdrop following the U.S.-India tariff agreement. On Monday, U.S. President Donald Trump unveiled a significant reduction in tariffs on Indian goods, slashing the rate from the previously imposed 25% down to 18%. This policy shift has had a ripple effect across Asian markets, including strengthening sentiment toward the Singapore currency as investors reassess their risk appetite in the region.

Trade Accord Sparks Improved Market Confidence

The tariff reduction announced by the Trump administration has injected fresh momentum into risk-on trading dynamics. When major economies ease trade tensions through lower import duties, emerging market currencies—including the Singapore currency—typically benefit from increased investor optimism. According to data from LSEG, the Singapore currency has climbed to 1.2710 against the U.S. dollar, reflecting this broader shift in market positioning. Financial markets generally interpret lower tariffs as a positive signal for global economic activity, which tends to favor currency appreciation in stable Asian hubs like Singapore.

OCBC Analysts Outline Near-Term Currency Trajectory

Experts from OCBC Bank’s research team have weighed in on the near-term outlook, suggesting that if current risk sentiment remains resilient and the U.S. dollar’s recent uptrend begins to moderate, the Singapore currency’s recent gains could stabilize. Rather than continuing to surge, the currency pair is projected to trade within a defined band between 1.2680 and 1.2760 levels. The strategists emphasized that maintaining this consolidation zone would indicate a healthy equilibrium between the two currencies, reflecting balanced market sentiment and reduced volatility pressures on the Singapore currency.

What Lies Ahead

The path forward for Singapore currency will largely depend on how long the current trade-optimism sentiment persists. Should the U.S.-India tariff accord lead to broader de-escalation in global trade tensions, support for the Singapore currency could extend further. Conversely, any renewed trade friction would likely pressure the currency lower. Market participants will be watching closely for any signals from U.S. policymakers regarding additional tariff adjustments, as these moves could either reinforce or challenge the prevailing bullish bias toward the Singapore currency in coming weeks.