Singapore Dollar: Range-bound consolidation outlook against US Dollar – Commerzbank

Commerzbank’s Charlie Lay and Dr. Henry Hao note that USD/SGD has eased from 1.2800 to around 1.2700 as the softer US Dollar (USD) and global risk sentiment dominate. With July core inflation in Singapore rising but still contained, Monetary Authority of Singapore (MAS) is seen under little pressure to tighten further. They expect USD/SGD to consolidate within a defined range in coming sessions.

Dollar pair seen consolidating in range

"The softer-than-expected reading reduces the urgency for further tightening by MAS, particularly after the back-to-back steepening of the SGD NEER appreciation slope in April and July."

"With underlying inflation momentum still under control, MAS has room to stay on hold at its next review in October unless price pressures broaden materially."

"For USD/SGD, it held steady yesterday at around 1.2700."

"USD/SGD is likely to remain driven primarily by the broader USD and global risk sentiment, rather than expectations of further MAS tightening."

"We look for near-term consolidation between 1.2650-1.2800."