Singapore Dollar: Range trade persists with softer data – Commerzbank

Commerzbank’s Dr. Henry Hao and FX analyst Charlie Lay highlight that Singapore’s September inflation and manufacturing data softened, keeping underlying price pressures contained despite higher global energy costs. MAS has narrowed its 2026 inflation forecasts and still expects 2027 inflation within 1.5–2.5%. Industrial production has moderated, and 2026 GDP growth is likely above 5%, supporting an unchanged modest appreciation path for the SGD NEER and a stable USD/SGD range.

Softer data supports SGD stability

"Singapore's September inflation eased to 2.2% yoy from 2.3% previously, while the MAS core inflation eased to 2.0% from 2.2% previously. The moderation in headline inflation was partly driven by softer transport inflation, which eased to 7.4% from 8.1%, although food inflation edged up to 2.4% from 2.3%, and healthcare inflation increased to 3.6% from 3.3%. The softer readings suggest that underlying price pressures remain relatively contained despite elevated global energy prices and supply disruptions in the Middle East."

"Earlier this month, MAS narrowed its 2026 core inflation forecast to 1.5-2.0% from 1.5-2.5% previously, while projecting headline inflation at around 2%. Year-to-date, headline and core inflation averaged 1.8% and 1.6% respectively. MAS projects both headline and core inflation at 1.5-2.5% in 2027. It expects import inflation to remain firm in the near term but some easing in external cost pressures next year."

"Industrial production averaged around 8.8% in Q3 compared to the average of 11.5% for July-August. The advance Q3 GDP of 5.4% yoy was based on July-August data, and as such, we could see a slight downward revision to the final Q3 GDP when it is released next month."

"2026 GDP growth is still likely to be above 5% given the 6% growth seen in the first three quarters of this year. We could see the official forecast for this year raised to 5-6% from 4.5-5.5% currently."

"The combination of softer inflation and moderating manufacturing growth will strengthen the case for MAS to maintain the status quo of a modest appreciation path for the SGD NEER. USD/SGD held steady yesterday at around 1.2800. It has been range bound between 1.2750-1.2880 since mid-September."