Singapore Dollar Consolidates Near Lows Against US Dollar Amid Expectations of Further Tightening

The Singapore Dollar (SGD) has been consolidating near its lows against the US Dollar (USD), according to UOB's Quek Ser Leang and Lee Sue Ann. The USD/SGD exchange rate held steady around 1.2800 after Wednesday's surge, with the SGD supported by expectations of further Monetary Authority of Singapore (MAS) tightening. UOB's Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) model suggests a range of 1.2764-1.2828 for USD/SGD today.

The analysts expect the USD to continue consolidating, likely between 1.2780 and 1.2815. They also note that renewed upward momentum in the USD could test the significant resistance level at 1.2835, which was highlighted on September 17th. On the downside, the 'strong support' level is now at 1.2770.

UOB turned positive on the USD two weeks ago and noted that a break below 1.2725 would indicate that the advance in USD has stalled. The analysts' views are based on their NEER model, which sits 1.76% above the mid-point.