USD/SGD: MAS on hold, SGD appreciating anyway – ING

The MAS re-affirmed the zero appreciation trend in the S$NEER in April, put in place a year earlier notes Rob Carnell, Research Analyst at ING and still expects SGD to appreciate in the near-term.

Key Quotes

“Since then, the run of economic data has been inconclusive, with some reversal in the prevailing trend of export strength and domestic softness – though this is likely just noise: labour and housing markets remain slack.”

“In the near term, we think the S$NEER is close to the band midpoint, so any spot moves will largely be determined by DXY swings, not monetary policy adjustments.”

“Further out, prospects are reasonable for core inflation to remain in the MAS’ 1-2% forecast range, and for some firming of domestic demand, helped by government infrastructure spending. Even with policy on hold “for an extended period” USDSGD should head modestly lower on a 12M horizon.”