Singapore Dollar: Holds tight range as PMI supports growth – Commerzbank

Commerzbank analysts note Singapore’s October manufacturing PMI eased slightly but stayed in expansion for a 15th month, with electronics supported by AI-related demand. They argue this points to resilient Q4 manufacturing and continued GDP growth into early 2027. In FX, they highlight USD/SGD has been trading sideways in a 1.2750–1.2850 band since September and expect near-term consolidation.

Sideways USD/SGD with resilient PMI

"October manufacturing PMI eased to 51.4 from 51.7 in September, but it still marked the 15th consecutive month of expansion. The moderation reflected slower growth in new orders (52.1 vs 52.2 previously), output (51.0 vs 51.2 previously) and employment (51.1 vs 51.3 previously)."

"However, new export orders edged higher to 51.9 from 51.8 previously, suggesting that external demand remains resilient. The electronics PMI also moderated to 52.5 from 52.9 previously, although it remained comfortably in expansion territory. This was supported by sustained global demand for AI-related semiconductors and electronics. Electronics new export orders rose to 53.2 from 53.1 previously, while new orders held firm at 53.5 from 53.6 previously."

"However, the continued expansion in new export orders, particularly in electronics, points to sustained external demand and suggests that the September weakness may not signal a broader manufacturing downturn. Q3 GDP expanded by 5.4% yoy, supported by technology-related sectors, and the latest PMI readings are consistent with continued growth in Q4, albeit at a more moderate pace. Manufacturing should remain a key growth driver into the first half of 2027."

"For USD/SGD, it has traded sideways since September, holding within the 1.2750-1.2850 range. We look for continued consolidation in the near term, with oil prices and the USD to be the main drivers."

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