USD/SGD: CPI in focus – OCBC

USD/SGD continued to trade in a subdued range near recent low. Pair was last at 1.2885, OCBC FX strategists Frances Cheung and Christopher Wong note.

SGD to continue staying strong

“Daily momentum is flat while RSI rose. Rebound risks not ruled out in the near term. Support here at 1.2870. Resistance at 1.30 (21 DMA), 1.31 levels. S$NEER was last estimated at ~1.88% above our model implied mid, with model implied spot lower bound at 1.2895.”

“Core CPI for Aug re-accelerated. For the first 8 months of the year, core CPI is at 3%. This may suggest that it is premature for MAS to ease policy stance at Oct MPC unless MAS switches from inflation fighting mode to supporting growth.

“SGD strength may continue to stay with us for a little longer, especially if USD softness presses on.”