OCBC strategists Sim Moh Siong and Christopher Wong see modest upside risk for USD/SGD as the Hormuz standoff impacts risk appetite and imported cost pressures. While the Singapore Dollar (SGD) remains a regional defensive currency, they note slowing bearish momentum and a rising RSI on USD/SGD, while also expecting Singapore inflation to rise to 2% as energy-related costs from the Middle East conflict pass through to supply chains.
Defensive SGD faces inflationary pressures
“Slight upside risk. USD/SGD moved higher overnight tracking the broader USD rebound.”
“The pair was last at the 1.2780 level. Bearish momentum on the daily charts diminished while the RSI rose.”
“Risks are somewhat tilted to the upside right now. Resistance here lies at 1.2790/1.28 levels (21, 100 DMA, 38.2% Fibo retracement of 2026 low from high), 1.2850 (200 DMA, 23.6% Fibo).”
“Support at 1.2750/60 levels (50 DMA, 50% Fibo), 1.2670 (76.4% Fibo). On relative terms, SGD may continue to trade like a regional defensive play, outperforming high-beta FX.”
“Looking ahead, our economists look for a prolonged US-Iran war and the continued closure of the Strait of Hormuz to trigger higher energy and petrochemical-related costs for businesses, which could push up inflation in 2Q26 and potentially beyond.”
(This article was created with the help of an artificial intelligence tool and reviewed by an editor.)
