Singapore Dollar: Strong exports underpin SGD – Commerzbank

Commerzbank's Singapore-focused FX research highlights robust non-oil domestic exports being driven by electronics and AI-related demand, with NODX growth already exceeding the government's upgraded forecast for the year. The report predicts that this technology demand, coupled with the Singapore Monetary Authority's steeper S$NEER appreciation path and a lower USD/SGD trend since July, will maintain the Singapore Dollar's strength.

July non-oil domestic exports (NODX) grew slightly less than anticipated, but still by a substantial 24.2% year-over-year, surpassing the Bloomberg consensus of 26.5%. This growth was primarily fueled by electronics, which more than compensated for a decline in non-electronic shipments. Year-to-date, NODX is up 19.4%, outperforming the government's upgraded full-year forecast of 14-16%.

Meanwhile, non-electronic NODX contracted 2.3% year-over-year, reflecting persistent weakness in chemicals, particularly pharmaceuticals and petrochemicals. Pharmaceutical exports experienced a significant drop of 57% year-over-year, following an 18% decrease in June, while petrochemical shipments fell 23% compared to the previous month.

The decline in pharmaceutical exports appears more consistent with sector-specific and supply-chain pressures rather than recent US tariff measures.