Singapore Dollar: Downside risks remain against US Dollar – OCBC

OCBC’s Sim Moh Siong and Christopher Wong note that USD/SGD is rebounding alongside a stronger US Dollar (USD), supported by higher US Treasury yields and firmer Fed hike expectations. The pair’s relatively higher beta to broad USD moves suggests further US Dollar Index (DXY) strength could lift USD/SGD near term, though they expect SGD’s underlying resilience and the S$NEER framework to temper the magnitude of any move.

Higher beta to DXY supports rebound

"USD/SGD traded higher alongside the rebound in USD, as higher US Treasury yields and firmer Fed hike expectations lend support to the dollar."

"The recent move reinforces USD/SGD’s relatively higher beta to broad USD moves compared with several ASEAN FX peers. A more sustained DXY rebound could therefore see USD/SGD extend higher in the near term."

"That said, SGD’s underlying resilience and the S$NEER policy framework should help temper the magnitude of the move."

"Mild bearish momentum on daily chart faded while RSI rose. Risks skewed to the upside in the interim. Resistance here at 1.2740 levels (61.8% fibo retracement of 2026 low to high), 1.2760/90 levels (50% fibo, 21 DMA). Support at 1.2680 (76.4% fibo), 1.2650."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)