Singapore Dollar Volatility Widens USD Range-Trading Band

According to United Overseas Bank's (UOB) analysis, the Singapore Dollar (SGD) has retreated sharply against the US Dollar (USD) after last week's spike. Quek Ser Leang and Lee Sue Ann from UOB note that despite this pullback, downside momentum remains limited.

The USD/SGD pair is expected to stay within a broader 1.2680-1.2780 band in coming weeks, with intraday pullbacks likely holding above 1.2695 and resistance at 1.2725/1.2735. The S$NEER remains elevated, implying a 1.2676-1.2740 trading range.

In their analysis, UOB's experts highlight that the recent sharp rise in USD/SGD to 1.2754 has scope to extend, but overbought conditions suggest any advance could be contained within a range of 1.2725/1.2765. However, this assessment turned out to be incorrect as USD staged a surprisingly sharp pullback to 1.2710.