OCBC strategists Sim Moh Siong and Christopher Wong point to little upside risk for USD/SGD as the Hormuz conflict negatively impacts risk appetite and imported cost pressures. While the Singapore Dollar (SGD) remains a defensive regional currency, they are seeing weakening bearish momentum and a rising RSI on USD/SGD, coupled with expectations that inflation in Singapore will accelerate to 2% as energy-related costs from the Middle East conflict flow through supply chains.
Defensive SGD faces inflationary pressures
“Slight risk to the upside. USD/SGD rose overnight following broad USD rebound.”
“The last pair was at 1.2780 levels. The bearish momentum on the daily chart has weakened while the RSI has increased.”
“Risk is slightly skewed to the upside for now. Resistance here at 1.2790/1.28 (21,100 DMA, 38.2% 2026 Fibo Retracement Low to High), 1.2850 (200 DMA, 23.6% Fibo).”
“Support at 1.2750/60 (50 DMA, 50% fibo), 1.2670 (76.4% fibo). On a relative basis, SGD can continue to trade like a regional defensive play, better performing against higher beta currencies.”
“Looking ahead, our economists see that the prolonged U.S.-Iran war and the continued closure of the Strait of Hormuz are driving energy and petrochemical costs for businesses that could help carry inflation into the second quarter and potentially beyond.”
(This article was created with the facilitate of an artificial intelligence tool and has been reviewed by an editor.)
