SGD Expected to Consolidate Against USD Amid Softer US Dollar

The Singapore Dollar (SGD) has shown signs of stabilizing against the US Dollar (USD), according to Commerzbank. In recent sessions, USD/SGD has eased from 1.2800 to around 1.2700, influenced by a softer US Dollar and global risk sentiment. This shift is expected to continue, with Commerzbank's analysts predicting that USD/SGD will consolidate within a defined range.

The Monetary Authority of Singapore (MAS) has been under less pressure to tighten monetary policy further, thanks to the July core inflation reading in Singapore, which rose but remained contained. As a result, MAS is likely to maintain its current stance at its next review in October, unless there is a significant broadening of price pressures.

In the near term, USD/SGD is expected to remain driven by broader market factors rather than expectations of further tightening from MAS. Commerzbank's analysts foresee consolidation between 1.2650-1.2800 for the dollar pair in coming sessions.