Singapore Dollar: Upside risks building as USD stays firm – DBS

FXStreet Insights Team FXStreet

DBS Group Research economist Eugene Leow warns that shorter-term Singapore Dollar (SGD) rates may face upside pressure despite recent flush liquidity. He notes SGD rates have decoupled from USD rates, with spreads stretched, while Fed hike expectations remain sticky and the USD strong. Leow highlights USD/SGD near 1.30 and Monetary Authority of Singapore (MAS) policy decisions as key factors for SGD rate repricing.

Shorter-term SGD rates face upside risks

"We continue to be wary about upside to shorter term SGD rates. Over the course of the past six quarters, market participants have gotten used to very flush SGD liquidity and persistent belief in USD weakness keeping frontend SGD rates low."

"In some ways, SGD rates appear decoupled from USD rates and the spread between the two has become even more stretched. There are some hints that risks to SGD rates may be biased to the upside."

"First, Fed hike expectations look sticky despite the fall in oil prices. Things are also compounded by renewed US-Iran tensions that sent oil prices spiking overnight."

"Second, the USD is proving to be strong with the de-dollarisation theme falling off. Investors may rethink low SGD rates if USDSGD pushes through 1.30."

"Third, if the MAS holds off from re-steepening the SGD NEER slope again in July (our house call), there would be one less reason for SGD rates to push relatively lower."

(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 remains depressed 0.7000, awaits FOMC Minutes

AUD/USD struggles to capitalize on its recent recovery move and trades with a negative bias below 0.7000 in Wednesday's Asian session. Amid geopolitical uncertainty, the US Dollar attracts some dip-buyers after a fresh leg up in US bond yields, keeping the pair under pressure despite hawkish RBA expectations. All eyes now remain on the FOMC Minutes.

USD/JPY holds firm near 158.50 ahead of Fed Minutes

USD/JPY hangs close to a one-and-a-half-week high near 158.50 in the Asian session on Wednesday, with bulls now awaiting a move beyond the 200-day SMA hurdle before positioning for further gains ahead of the FOMC Minutes. Meanwhile, a fresh leg up in US bond yields revives US Dollar demand amid geopolitical uncertainties, boosting the pair amid dovish BoJ commentary.

Gold trims losses, back above $4,100

Gold now manages to regain some balance, returning to the area above the key $4,100 mark per troy ounce following the closing bell in Europe on Wednesday. The yellow metal’s sharp pullback comes in tandem with marked gains in the US Dollar and a marked bounce in US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum and XRP fall liquidating $550M

Bitcoin’s correction follows a recent rejection due to supply around $87,200. Altcoins are generally in a correction trend, as Ethereum edges lower toward the next key support at $2,600 and Ripple extends its down leg near the $1.45 demand area.

Fed Minutes: Officials saw inflation risks worsening before September hike

All participants at the Federal Reserve's (Fed) September 15–16 meeting supported the 25-basis-point rate increase, while most judged that another hike would probably be appropriate by the end of the year. The Minutes show policymakers increasingly focused on upside inflation risks, a resilient economy and the possibility that strong AI investment could add to demand pressures.

The UK 30-year gilt just hit a 1998 high. Is that good or bad for the British Pound?

The yield on the UK's 30-year government bond, or gilt, went through 6% on October 1 for the first time since early 1998, and on Monday the Pound was at its strongest against the Euro since June 2025. The gilt market's 28-year high is mostly someone else's. Since early May, the 30-year gilt yield has risen about 0.15 of a percentage point and the US 30-year about 0.7.