Macro/FX Watch: Singapore’s MAS could struggle to aid SGD recovery Macro/FX Watch: Singapore’s MAS could struggle to aid SGD recovery Macro/FX Watch: Singapore’s MAS could struggle to aid SGD recovery

Macro/FX Watch: Singapore’s MAS could struggle to aid SGD recovery

Forex 3 minutes to read
Charu Chanana

Head of FX Strategy

Summary:  Singapore’s Monetary Authority announces its policy decision on Friday and would likely keep its policy settings unchanged amid upside risks to inflation and the global higher-for-longer narrative. However, room for SGD appreciation is limited as it trades near the top of the SGD NEER band. Strength in the Singapore dollar will need to wait for a clearer turn in US dollar or a pickup in Chinese yuan.

The Monetary Authority of Singapore (MAS) will announce its next decision on October 13. The MAS policy decision encompasses three aspects – midpoint, slope and width – of the SGD NEER policy band to determine the range in which SGD can trade against a basket of currencies. The last decision in April saw Singapore’s central bank keep all three parameters unchanged after tightening in three separate decisions since April 2022.

Since the April 2023 announcement to keep policy unchanged, the US economic momentum has surprised on the upside and inflation has come down but the 2% target remains elusive. Most global central banks, as a result, continue to stick with the higher-for-longer narrative. Meanwhile, China’s economy continues to remain muddled with property sector woes and uninspiring pickup in consumption. This could mean MAS would have room to keep its policy settings unchanged this week, and maintain the current estimated appreciation of 1.5% per annum in the SGD NEER which brings some level of tightening.

SGD NEER and its estimated trading bands (Morgan Stanley). Source: Bloomberg

Domestically, Singapore’s inflation has eased from a peak of 7.5% YoY in August 2022 to 4.0% YoY in August 2023 but remains higher than pre-covid levels. Upside risks remain from food and energy prices, as well as the GST increase to 9% effective next year. On the growth front, Singapore narrowly escaped a recession after Q2 GDP growth printed +0.1% QoQ after a decline of 0.4% in Q1. But recent PMI and retail sales have surprised to the upside and a services led recovery continues amid post-covid rise in inbound tourism. Manufacturing sector however continues to pose headwinds, together with weakening global growth outlook, which suggests that the next MAS move will likely be that of easing, but it may be too early to get any signals on that yet given the next MAS meeting is in April 2024.

USDSGD has traded higher to 1.3764 amid the strength of the US dollar and the spillovers from a weak yuan. SGD is likely to remain weak as long as the USD strength continues, but a recovery may ensue later this year or next year particularly if China’s stimulus actions bring a recovery in economic momentum. If the MAS stays on hold, SGD should stay supported by room for appreciation is limited as SGD NEER is trading close to the upper band. Technicals suggest USDSGD could rise to 61.8% retracement at 1.3934 before dollar loses steam but a recovery in SGD may ensue if the long dollar positioning starts to be challenged.

Market Takeaway: Limited room for SGD to rally on a hold decision from the MAS as SGD NEER trades near the top of the range.

Source: Bloomberg

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.