Outlook
The MAS decision to hold its policy stance and keep the S$NEER band unchanged, alongside higher 2026 inflation forecasts and a resilient growth outlook, suggests the SGD is likely to stay in a narrow range near current levels. External trade tensions and policy uncertainty remain a backdrop that could cap gains or trigger modest moves, depending on risk sentiment and global dynamics. Current price action shows SGD pairs trading within tight ranges, with USD/SGD at 0.7875 (about 1.6% above the 3-month average of 0.7748) and a 3-month range of 0.7644–0.7934, while other cross-rates sit near their averages.
Key drivers
- MAS policy: The central bank kept its monetary stance and the S$NEER band unchanged, signaling that the current policy remains appropriate for medium-term price stability.
- Inflation forecast: 2026 inflation forecasts were raised to a 1%–2% range, indicating expectations of firmer price pressures ahead.
- Growth outlook: Singapore’s economy is seen as resilient in 2026, with underlying price pressures returning gradually toward long-term trends.
- External uncertainty: Global trade tensions and policy developments continue to influence SGD dynamics, adding a layer of risk to downside/throughput in the currency.
- Price action snapshot:
- SGD/USD at 0.7875, 1.6% above its 3-month average of 0.7748, within a 3-month range of 0.7644–0.7934.
- SGD/EUR at 0.6643, near its 3-month average, in a 0.6593–0.6696 range.
- SGD/GBP at 0.5751, about 0.8% below its 3-month average of 0.58, within a 0.5730–0.5873 range.
- SGD/JPY at 121.9, about 0.9% above its 3-month average of 120.8, in a 117.4–123.7 range.
Range
SGD/USD: 0.7644–0.7934
SGD/EUR: 0.6593–0.6696
SGD/GBP: 0.5730–0.5873
SGD/JPY: 117.4–123.7
What could change it
- MAS policy shift: Any change to the NEER band or monetary stance could re-price the SGD significantly.
- Inflation or growth surprises: An outturn notably above or below current forecasts could alter policy expectations and SGD direction.
- Global risk sentiment: A shift in risk appetite or major trade-policy developments could drive SGD gains or losses against the USD and other peers.
- USD trajectory: Significant moves in the USD driven by Fed or other major central banks could impact SGD crosses, given the SGD’s sensitivity to broad dollar moves.
