Singapore Dollar Sees Bullish Turn as Investors Build Long Positions Amid Policy Optimism

Investor sentiment toward the Singapore dollar (SGD) has shifted decisively, with long positions reaching their highest levels since late May 2025. The move reflects growing confidence in Singapore’s macroeconomic stability, hawkish monetary stance, and its safe-haven appeal amid global uncertainty.

 

Key Highlights:

 

According to a Reuters poll, long positions in SGD are at their strongest since early April 2023, marking a reversal from seven months of bearish sentiment.

 

The Monetary Authority of Singapore (MAS) is expected to maintain its current policy settings, supported by core inflation above 3% and Q2 GDP growth of 2.9%.

 

The Singapore dollar recently surged to 1.292 per US dollar, its highest level since September 2024, with a year-to-date appreciation of 5.3%.

 

Market Drivers:

 

MAS’s reluctance to ease policy has reinforced investor confidence, especially as other central banks signal dovish shifts.

 

Singapore’s triple-A sovereign rating and strong external balance sheets continue to attract capital inflows.

 

The US Federal Reserve’s anticipated rate cuts have weakened the dollar, prompting a rotation into Asian currencies, including the SGD.

 

Regional Context:

 

The rally in SGD is part of a broader trend across Asia, with currencies like the Taiwan dollar and Malaysian ringgit also strengthening.

 

Analysts at Bank of America and Maybank cite relative value and safe-haven status as key reasons for favoring SGD over low-yielding regional peers.

 

Outlook: With MAS expected to hold its hawkish stance and global investors diversifying away from the US dollar, the Singapore dollar may continue to appreciate in the near term.

 

Sources: Reuters, The Straits Times, Business Times Singapore, OTE News.