Singapore Dollar: NEER strength caps upside for USD/SGD – UOB

UOB Global Economics & Markets Research notes that USD/SGD closed at 1.2900, with the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) estimated at 1.75% above its mid-point. The team expects the NEER to stay in a 1.50%–2.00% band above the mid-point in the current session, implying a projected USD/SGD trading range between 1.2872 and 1.2937 as the US Dollar remains broadly supported.

SGD NEER suggests tight intraday range

"Asian currencies were mixed on Thu. USD/IDR fell to 17,710 (-0.16%) as Bank Indonesia (BI) delivered another 25bps hike, providing some support. USD/INR fell to 94.53 (-0.28%), while USD/KRW rose 1.50% to 1,539.30. Similarly, MYR underperformed within the region, closing down 1.3% to 4.1170 against the USD. USD/SGD closed at 1.2900 (+0.15%)"

"The SGD NEER index on our model closed the day at 1.75% above the mid-point and it is likely to remain between 1.50% and 2.00% above the mid-point for today's session. This implies a USD/SGD range of between 1.2872 and 1.2937."

"Risk sentiment improved modestly on Thu as markets continued to digest the Fed’s hawkish tilt alongside resilient US data. Firm labour and spending signals reinforced the higher-for-longer narrative, keeping front-end yields elevated and the US dollar supported."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)