Singapore Dollar: MAS signals inflation concern – Commerzbank

FXStreet Insights Team FXStreet

Commerzbank’s Charlie Lay notes Monetary Authority of Singapore (MAS) unexpectedly tightened policy for a second meeting, slightly increasing the Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) slope and stressing the move was smaller than April’s. He says MAS is signalling greater concern over inflation risks than growth, with stronger-than-expected H1 2026 growth and forecasts likely to be revised up, while USD/SGD only slipped modestly to around 1.2890.

Second consecutive MAS tightening step

"In a surprise move, the Monetary Authority of Singapore (MAS) tightened monetary policy for the second consecutive meeting. It increased the rate of appreciation of the SGD NEER policy band “very slightly”, with no changes to the centre or width of the band. Importantly, MAS said that the increase was smaller than the tightening in April."

"MAS could have easily left policy unchanged given that inflation remains relatively benign and energy prices have retreated from their April peaks."

"Its decision to act signals that MAS remains more concerned about the upside risks to inflation than the downside risks to growth."

"Growth was stronger-than-expected in H1 2026 at 6%. The official forecast is likely to be revised up from 2-4% currently."

"MAS maintained its headline and core inflation forecasts at 1.5-2.5% for 2026. USD/SGD fell only modestly to around 1.2890 following the announcement."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD finds some support near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies above mid-0.7100s during the Asian session on Friday, stalling the previous day's heavy losses to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the currency pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of consumer inflation figures before placing fresh bets.

USD/JPY holds steady around mid-154.00s; looks to US CPI for fresh impetus

USD/JPY preserves the previous day's recovery gains and consolidates around mid-154.00s during the Asian session on Friday as US Dollar bulls opt to wait for the release of the latest US consumer inflation figures. Meanwhile, the August US PPI report, released on Thursday, bolstered Fed rate-hike bets and acts as a tailwind for the buck. However, a more hawkish BoJ repricing might continue to underpin the Japanese Yen and cap the currency pair.

Gold hangs near one-week low, above $4,300 as focus shifts to US CPI

Gold languishes near its lowest level in over a week during the Asian session on Friday as rising Fed rate hike bets, bolstered by US PPI, underpin the US Dollar. Traders now look to the US CPI report for more cues about the Fed's policy path amid inflation risks stemming from higher energy prices due to the Middle East conflict. The outlook will drive the USD and influence the non-yielding bullion.

Ethereum holds above $2,400 as PPI data strengthens rate hike expectations

Ethereum (ETH) is down 0.7% on Thursday as the second-largest cryptocurrency looks to recover from earlier pressure following the release of stronger US inflation data. The Producer Price Index (PPI) for final demand rose 0.4% in August, matching market expectations after a revised 0.1% increase in July, according to the US Labor Department.

ECB recap: A hawkish hike despite downside growth risks

The European Central Bank (ECB) increased the Deposit Facility Rate to 2.50%, the Refinancing Rate to 2.65% and the Marginal Lending Facility to 2.90%, effective from September 16. The decision was accompanied by a clear warning that the outlook remains highly uncertain, with risks tilted to the upside for inflation and to the downside for growth.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.