USD/SGD: Downside may be relatively limited - Westpac

The SGD has outperformed a few regional peers since the MAS decision and SGD NEER is at around 0.89% above mid-point, while 6M forward NEER is at a further 0.3% higher, suggesting only a very mild tightening is in the price, according to Frances Cheung, Research Analyst at Westpac.

Key Quotes

“Risk is to the downside to forward points if market turns more hawkish on MAS outlook, and if there is a catch-up with some regional peers in pricing in a tight USD liquidity situation. On spot, as the positive slope of the SGD NEER is believed to be one that is milder than previous ones, the current position of SGD NEER means downside to USD/SGD may be relatively limited.”