Singapore Dollar: MAS tightening but gains constrained – OCBC

OCBC’s Christopher Wong notes that Singapore Dollar (SGD) has held relatively steady despite a firmer US Dollar (USD) and higher Oil prices, with MAS tightening expectations underpinning the S$NEER. USD/SGD trades near recent highs with intact bullish momentum. With S$NEER already strong, further Monetary Authority of Singapore (MAS) slope steepening may not trigger significant SGD gains against a stronger Dollar.

USDSGD consolidation and MAS outlook

"SGD held relatively steady despite firmer USD and higher oil prices. MAS tightening expectations should underpin S$NEER, though its position on the strong side of the band may limit further gains, particularly against a stronger USD."

"USD/SGD was a touch firmer near recent highs. Last at 1.28 levels. Bullish momentum on daily chart intact while RSI is flat. 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)."

"For SGD, the implications may be more nuanced. With the S$NEER already trading on the strong side of its policy band, some tightening expectations may already be reflected in the currency. A slight slope steepening would reinforce the medium-term appreciation bias, but may not necessarily trigger significant further SGD gains, particularly against a firmer USD."

"Conversely, an unchanged stance could disappoint market expectations and see the S$NEER ease towards the midpoint. We continue to favour SGD resilience on a trade-weighted basis, although USD/SGD may remain sensitive to broader USD, US rates developments, sentiment shifts in the near term."