Singapore Dollar: Two-way trade persists against US Dollar – OCBC

OCBC’s Christopher Wong describes USD/SGD as range-bound, trading two-way in subdued fashion, driven by US Treasury yields, USD moves and RMB sentiment. Strong PMI data are unlikely to change MAS policy after October’s decision to maintain the appreciation stance. With S$NEER in the upper half of its band, SGD outperformance may be limited unless the Dollar weakens substantially.

Range-bound with external drivers

"USD/SGD continued to trade two-way in subdued fashion, taking cues from opposing forces of US Treasury yields, USD and RMB. On domestic data, manufacturing PMI eased to 51.4 in October from 51.7 previously, while electronics PMI moderated to 52.5 from 52.9."

"Both readings remain comfortably in expansionary territory, with electronics new export orders rose to 53.2, their highest since May 2018, pointing to sustained underlying demand despite recent concerns surrounding the AI investment cycle."

"For SGD, the latest PMI readings are unlikely to materially alter MAS policy expectations, particularly following October’s decision to maintain the prevailing appreciation stance. We retain our constructive medium-term SGD outlook, although near-term direction remains largely dependent on broader USD movements, US Treasury yields and RMB sentiment."

"With S$NEER already trading in the upper half of its policy band, scope for SGD outperformance against regional peers may remain limited unless the USD weakens more substantially. This week’s US midterm elections and US labour-market data will be important for near-term direction."

"USD/SGD last at 1.2790 levels. Daily momentum is not indicating a clear bias while decline in RSI moderated. Two-way trades likely for now. Support at 1.2760 (50 DMA), 1.2740 (61.8% fibo retracement of 2026 low to high). Resistance at 1.2810 (100 DMA), 1.2850 levels (38.2% fibo)."

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