Singapore Dollar strength faces consolidation risks amid USD rebound and key US inflation data this week.
The USD/SGD pair is expected to consolidate as recent Singapore Dollar gains encounter a modest US Dollar rebound and position unwinding ahead of US core PCE data and the Jackson Hole symposium. Analysts note the SGD traded slightly softer overnight as the USD recovered from recent lows, partly due to position adjustments before key economic releases.
July core inflation in Singapore rose to 2.0% year-on-year from 1.6%, below the 2.2% consensus, while headline CPI increased to 2.2% from 1.9%, also softer than expected. Despite the softer print, the Monetary Authority of Singapore’s July tightening and firm growth outlook are unlikely to shift the SGD trajectory significantly.
Near-term consolidation is possible, particularly if the USD experiences a short squeeze ahead of Jackson Hole. Technical indicators suggest bearish momentum remains intact, though the RSI shows signs of recovery from oversold levels, with resistance at 1.2740 and 1.2790.