OCBC’s Christopher Wong observes that Singapore Dollar (SGD) has held relatively steady despite softer Asian FX, with USD/SGD around 1.2780. Strong manufacturing output and persistent underlying price pressures lead OCBC to expect Monetary Authority of Singapore (MAS) to slightly steepen the S$ Nominal Effective Exchange Rate Index (S$NEER) slope at the mid‑October meeting.

Data and MAS stance underpin SGD

"On the data front, August manufacturing output rose 15.4% YoY, up from a revised 6.9% in July, supported by strong gains in electronics and precision engineering, although output slipped 0.5% MoM."

"The data points to still-resilient activity, helped by AI-related demand. Following the CPI data last week, we now expect MAS to slightly steepen the S$NEER slope at the next MPC meeting in mid-Oct, as underlying price pressures remain intact."

"Near term, the pair should continue to take its cue from moves in USD/rates and RMB, while the prospect of further MAS tightening should help keep SGD relatively resilient against some of the higher-beta Asian FX."

"USD/SGD last at 1.2777. Bullish momentum on daily chart intact but there are tentative signs of it slowing while RSI shows signs of easing lower. Consolidation likely."

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

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