Singapore Dollar: Range trading persists with strong performance against US Dollar – Commerzbank

Commerzbank’s Moses Lim highlights that USD/SGD fell 0.3% to 1.2910 on Dollar weakness, with the pair consolidating in a 1.29–1.30 range since mid-June. Singapore’s strong growth backdrop and benign inflation support the Singapore Dollar, which is the third-strongest Asian currency this year. The Monetary Authority of Singapore could consider tightening policy if inflation pressures rise.

Singapore Dollar holds firm in range

"Advance Q2 GDP grew faster than expected at 5.7% yoy (Bloomberg consensus: 5.5%) vs 6.3% in Q1, which was revised up from 6.0% previously. This implies growth of around 6.0% in H1 2026, above the government’s full-year forecast range of 2-4%. As such, the government may revise its 2026 growth forecast higher when the final Q2 GDP data is released in August."

"The economy should remain resilient through the rest of the year, supported by the ongoing semiconductor upcycle. Renewed Middle East tensions pose downside risks via higher commodity prices and weaker external demand, but resilient domestic consumption and AI-driven export growth should help cushion the impact."

"Attention now turns to the June CPI release on 23 July. Inflation remained benign at 1.8% yoy in May, although risks are tilted to the upside if supply bottlenecks and higher crude prices persist. Given the resilient growth backdrop, MAS could consider tightening policy if inflationary pressures pick up in June."

"In FX, USD-SGD fell 0.3% to 1.2910 yesterday, driven by a weaker USD. The pair has consolidated around the 1.29-1.30 range since mid-June and could remain within this range in the near term."