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A key risk area is the U.S. Federal Reserve’s future posture. If the Fed remains hawkish or is less dovish than anticipated, it could cause the dollar to strengthen further, which would impact the Singapore dollar negatively. Market participants should monitor signals about U.S. inflation, the potential for further rate hikes, and the Fed’s communication tone.
Other geopolitical factors, such as the escalation of the Russia-Ukraine conflict or unforeseen COVID-19 outbreaks in China, could also influence currency movements. China's reopening, while promising, remains subject to uncertainties that could affect regional trade flows and investor sentiment.