OCBC strategists Sim Moh Siong and Christopher Wong note that USD/SGD is trading in a subdued range near recent lows, with softer US CPI and labour data keeping Fed cut expectations intact and weighing on the Dollar. Stronger JPY and RMB, plus expectations for Monetary Authority of Singapore (MAS) tightening, keep Nominal Effective Exchange Rate Index (S$NEER) near the strong side of its band, suggesting further USD/SGD downside will be incremental, with 1.2590 as support and 1.2670–1.2710 as resistance.

Range-bound pair with limited downside

"USDSGD traded a subdued range, near recent lows."

"With market expectations for MAS tightening intact, we should expect S$NEER to continue hovering near its strong side of the band."

"But this also implies that further downside in USDSGD becomes more incremental unless we see a renewed round of broad USD softness."

"Still expect 2-way trades in absence of fresh catalyst."

"Support at 1.2590 (Jan low)."

"Resistance at 1.2670, 1.2710 (21 DMA)."

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