Singapore Dollar: Priced-in MAS move limits gains against US Dollar - OCBC

OCBC strategists Sim Moh Siong and Christopher Wong expect Monetary Authority of Singapore (MAS) to slightly steepen its S$NEER policy band slope on Wednesday. With tightening largely priced in, the immediate Singapore Dollar (SGD) reaction may be muted. While a steeper slope should support SGD, persistent US Dollar (USD) strength and elevated US Treasury yields could limit gains.

Policy slope support versus strong USD

"Focus on Wed’s MAS policy decision and 3Q GDP. SGD softened modestly against the USD on Monday, although the move remained contained despite broader USD strength and elevated US Treasury yields."

"With expectations for another slight tightening already largely priced in, the immediate SGD reaction may be muted unless MAS delivers an element of surprise, either through a more aggressive adjustment or an unexpected hold. The accompanying GDP estimates and MAS’ assessment of inflation risks will also shape expectations for the policy path ahead."

"Beyond Wednesday, we expect USD direction and US Treasury yields to remain important drivers of USD/SGD. While a steeper S$NEER slope should provide underlying support for SGD, sustained USD strength and elevated US Treasury yields could continue to constrain gains against the USD."

"USD/SGD was last at 1.2810 levels. Bullish momentum on daily chart intact while RSI fell modestly. 2-way trade still likely, as we keep a look out for rallies to fade into."

"Resistance at 1.2820 (100 DMA), 1.2840 (38.2% fibo). Support at 1.2740/50 levels (61.8% fibo retracement of 2026 low to high, 50 DMA)."

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