Singapore Dollar: Range trade persists with softer data – Commerzbank
Commerzbank’s Dr. Henry Hao and FX analyst Charlie Lay highlight that Singapore’s September inflation and manufacturing data softened, keeping underlying price pressures contained despite higher global energy costs.
Commerzbank analysts Dr. Henry Hao and Charlie Lay note that softer Singaporean inflation and manufacturing data have maintained price pressures despite higher global energy costs. The Monetary Authority of Singapore (MAS) has reduced its 2026 inflation forecasts, expecting 1.5-2.5% in 2027, with 2026 GDP growth likely above 5%.
Singapore's September inflation eased to 2.2% year-over-year from 2.3% previously, while core inflation moderated to 2.0% from 2.2%. Transport inflation softened to 7.4% from 8.1%, while food inflation rose to 2.4% from 2.3%, and healthcare inflation increased to 3.6% from 3.3%. Despite elevated global energy prices and Middle East supply disruptions, underlying price pressures remain contained.
MAS projected headline and core inflation to be within 1.5-2.5% in 2027, with import inflation remaining firm near-term but easing in external cost pressures next year. Industrial production averaged 8.8% in Q3, compared to 11.5% in July-August, with a potential slight downward revision to Q3 GDP when the final data is released.
The combination of softer inflation and moderating manufacturing growth supports MAS's stance of a modest SGD NEER appreciation. USD/SGD held steady at around 1.2800, ranging between 1.2750-1.2880 since mid-September.
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