SGD Consolidates at 1.28 as USD Hike Expectations Trimmer

The Singapore Dollar (SGD) has been consolidating around the 1.28 level against the US Dollar (USD), according to OCBC's analysts Sim Moh Siong and Christopher Wong.

This is due in part to softer-than-expected US Producer Price Index (PPI) data, which has trimmed expectations for a Federal Reserve hike but failed to trigger fresh USD selling.

While the pair still faces downside risks over time, geopolitical tensions and its inability to break lower suggest that the next leg down may be challenging.

The analysts note that geopolitical uncertainty is partly tempering appetite to chase the USD lower, particularly heading into the weekend.

Houthi drone attacks on Saudi Aramco's Jazan refinery and the US naval blockade of Iranian ports are contributing to this uncertainty.