“Given the Singapore dollar’s stronger performance against its regional peers, the ytd rally in USDSGD isn’t necessarily a concern for the MAS. However, recent dynamics within the Singapore dollar nominal effective exchange rate (S$NEER) basket may be starting to turn,” says Zhao-Murray.
As the Monetary Authority of Singapore (MAS) looks to continue tightening its policy in October amid the inflationary environment, the Singapore dollar is expected to rally against its currency basket, but may still struggle to outpace the strengthening US dollar, says Monex’s Jay Zhao-Murray.
The Singapore dollar has weakened against the US dollar for nearly two years now, with losses accruing to 4.3% year-to-date (ytd). According to the Monex FX market analyst, his base case sees USDSGD rising to 1.44, although risks are “tilted” to the downside.
