Singapore dollar slips on surprise monetary policy shift

The USD/SGD jumped to a high of 1.3570 this morning.

The Singapore dollar lost ground to the greenback this morning following an unscheduled monetary policy shift by the Monetary Authority of Singapore (MAS).

Data from UOB show that the USD/SGD jumped to a high of 1.3570 immediately after the statement release this morning, from last night’s level of 1.3389, and has since stabilized at the 1.3506 level.

“Our SGD NEER index fell to 1.2% below the midpoint immediately after the announcement, from 0% to -0.6% range in the past four weeks. The SGD NEER is likely to trade at the weaker half of the policy band (between 1-1.5% below midpoint) and implying a USD/SGD range of 1.3476 to 1.3544. In view of the lowered SGD NEER slope, we believe the USD/SGD could trade towards the 1.40-level over the next six months,” stated UOB.