Singapore Dollar Vulnerable as US Dollar Strengthens

The Singapore Dollar (SGD) is facing downside risks against the US Dollar (USD), according to OCBC's analysis. The USD/SGD pair has rebounded due to a stronger US Dollar, supported by higher US Treasury yields and firmer Fed hike expectations.

This rebound has reinforced USD/SGD's relatively high beta to broad USD moves compared with several ASEAN FX peers. A more sustained DXY rebound could see USD/SGD extend higher in the near term, with resistance at 1.2740 levels (61.8% fibo retracement of 2026 low to high) and 1.2760/90 levels (50% fibo, 21 DMA).

However, OCBC's Sim Moh Siong and Christopher Wong expect SGD's underlying resilience and the S$NEER policy framework to temper the magnitude of any move.