BNY’s data shows USD/SGD was the weakest “non-carry” currency pair over the past month. It also recorded monthly average flow magnitude higher than EUR/USD.
USD/SGD saw sustained net selling for almost three consecutive trading weeks. Over the last two sessions, outflows were softer than earlier in the period.
The data points to a possible change in near-term momentum. BNY data also indicates SGD may face an unwind into month-end after a strong February.
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We’ve seen the US dollar weaken significantly against the Singapore dollar for most of February, making it one of the weakest pairs. However, the selling pressure on USD/SGD has noticeably softened in the last few trading sessions. This suggests the momentum that drove the Singapore dollar higher is starting to fade.
Given this potential for a reversal, we are looking at strategies that profit from a rising USD/SGD into early March. Buying short-dated call options on USD/SGD could be an effective way to position for a rebound. This approach allows us to capture potential upside while strictly limiting our risk to the premium paid.
This view is supported by the latest US inflation data from last week, which came in hotter than expected at a 3.2% annual rate, suggesting the Fed may delay rate cuts. In contrast, the Monetary Authority of Singapore has maintained its neutral policy stance, giving little new incentive to buy the SGD. This policy divergence strengthens the case for a higher USD/SGD.
We remember a similar setup back in the fourth quarter of 2025, when a prolonged period of SGD strength abruptly reversed following a shift in risk sentiment. That unwind was quick and caught many off guard. The current exhaustion in selling pressure feels reminiscent of that period.
As we approach the end of February, we need to be alert for an unwind driven by month-end portfolio adjustments. After such a strong run, the SGD appears vulnerable to profit-taking. This could be the catalyst that triggers the next move higher in the pair.
