MUFG’s Asia FX team maintains a positive outlook on the Singapore Dollar (SGD), supported by a strong Chinese Yuan and domestic growth. The Monetary Authority of Singapore (MAS) has sustained its Nominal Effective Exchange Rate Index (S$NEER) policy settings, and Singapore’s GDP for Q4 is expected to be revised upwards.
The SGD and Malaysian Ringgit (MYR) are projected to benefit from steady CNY sentiment and stable domestic economic fundamentals. The final Q4 GDP figures for Singapore may exceed initial estimates, indicating robust domestic progress. MAS retained its monetary policy stance at the January review, keeping the rate of appreciation of the S$NEER band unchanged.
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We are holding a constructive view on the Singapore dollar, anticipating it will strengthen against the US dollar in the coming weeks. Support is coming from a firming Chinese Yuan, which was bolstered by China’s January trade surplus recently beating expectations at $95 billion. This reinforces positive sentiment across the region.
Monetary Authority Of Singapore And Strategies
The Monetary Authority of Singapore confirmed its steady appreciation policy for the S$NEER in its January 2026 meeting, signaling confidence in the domestic economy. This confidence seems justified, as Singapore’s latest manufacturing PMI for January registered a solid 51.2, indicating continued expansion. We also expect the final Q4 2025 GDP figures, due soon, to be revised upward from initial estimates.
Given this outlook, traders could consider positions that benefit from a lower USD/SGD exchange rate, which is currently testing the 1.3350 level. One direct strategy is to purchase USD/SGD put options, which provides downside exposure while limiting risk to the premium paid. This allows participation in the expected move toward the 1.3200 support level seen late last year.
We should remember the price action from mid-2025, when uncertainty around US Federal Reserve policy caused a sharp, but temporary, spike in the pair toward 1.38. While fundamentals now appear more favorable for the SGD, that period serves as a reminder of how quickly sentiment can shift. Therefore, using defined-risk strategies like options spreads could be a prudent way to express this view.
