Singapore Dollar: Volatility widens range-trading band against US Dollar – UOB

Singapore's dollar has shown increased volatility, prompting a wider range-trading band against the US Dollar, according to United Overseas Bank (UOB). The bank's analysts, Quek Ser Leang and Lee Sue Ann, note that USD/SGD has fallen sharply since last week's spike but the downward momentum has not intensified significantly.

UOB anticipates that USD/SGD will remain within a broader 1.2680–1.2780 range in the coming weeks, with intraday drops likely staying above 1.2695. The major resistance levels are observed at 1.2725 and 1.2735. Currently, the Singapore Dollar Exchange Rate (S$NEER) remains elevated, suggesting a potential trading range of 1.2676–1.2740.

In the short term, the USD's sharp pullback to 1.2710 presents an opportunity for further decline, but no clear increase in downward momentum suggests that the decline is unlikely to break below 1.2695. The resistance levels are identified as 1.2725 and 1.2735.

Over the next few weeks, UOB expects USD to trade between 1.2705 and 1.2780, after initially being negative on the USD for about a month. Despite a sharp retreat to 1.2710, USD is still considered neutral for now, as there has been no clear upward momentum indicating a resurgence in the recent weakness. However, the rising volatility indicates wider range-trading between 1.2680 and 1.2780.

The article is based on market observations from UOB's analysts and insights from other experts, highlighting the fluctuating trends in the forex market and their potential impacts on various currencies.