Commerzbank’s Charlie Lay highlights that USD/SGD has been stable around 1.2920, with SGD NEER estimated at roughly +0.8% above its mid-point. The pair has traded within a 1.29–1.30 range for a month and Lay expects near-term consolidation. The +/-2% NEER band implies a broader USD/SGD range between 1.2780 and 1.3300.

SGD NEER stays moderately elevated

"In FX, USD/SGD was stable yesterday at around 1.2920. It has held within the 1.29-1.30 range for the past month, and we look for consolidation in the near term. On a SGD NEER basis, we estimate it is around +0.8% above the mid-point for USD/SGD at 1.2920, USD/MYR at 4.0850, and USD/CNY at 6.7940. The +/-2% band around the mid-point corresponds to USD/SGD between 1.2780-1.3300, with the mid-point at 1.3040, ceteris paribus."

"May retail sales rose 3% yoy (Bloomberg consensus: 4.7%) vs 5.4% previously. On a 3-month moving average (3mma) basis, growth moderated to 4.3% yoy from a firm 6.2% in April. Excluding autos, it eased to 3.7% from 4.5% previously and on a 3mma basis, growth slowed to 3.7% vs 6.3% previously."

"The data still pointed to a continued expansion, supported by a healthy labour market. Consumer demand is expected to remain resilient and complement the strong external sector, which continues to benefit from AI-related exports."

"The next key release will be the advance Q2 GDP report which is due sometime next week. It is expected to remain firm at around 5.6% yoy vs 6.0% in Q1. The manufacturing sector is expected to be a driver, aided by electronics production. Industrial output expanded by 14.8% yoy in April-May compared to the same period last year vs 8% in Q1."

"This would imply around 5.8% expansion in H1 2026. We could see the government revise up the official forecast of 2-4% for this year when the final Q2 GDP is released around mid-August."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)