USD/SGD bounced this morning, tracking the move higher in USD/CNH. Pair was last seen at 1.3444, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

SGD can still remain resilient on trade-weighted terms

“Mild bullish momentum on daily chart continues to fade while the dip in RSI moderated. Consolidation likely in the near term. Support at 1.3410, 1.3340/60 levels (21, 200 DMAs) and 1.3290 (61.8% fibo retracement of Jun high to Oct low). Resistance at 1.3520 levels. S$NEER has continued to ease; last at 0.92% above model-implied mid. Looking back, SGD has been easing since Oct-2024 on tradeweighted terms even as MAS maintained policy status quo.”

“That said, SGD remains stronger vs. peers in the basket but it is less strong today (vs. than for most of the year). Historically the positive correlation between the change in S$NEER and MAS core inflation shows that SGD strength can ease when core inflation eases materially. Monday’s release of CPI report saw both headline and core CPI surprised to the downside. The sharp pullback has also led to chatters if MAS would ease soon at the next MPC in Jan-2025.”