USD/SGD likely to trade around 1.40 by end-2016, says Commerzbank

In the mid-2011, the Singaporean dollar had appreciated to a record high against the US dollar to 1.20. It had remained within a stable range between 1.20-1.30 during mid-2011 to mid-2014. But the Singaporean dollar, since mid-2014, started depreciating markedly because of softness in regional currencies, stronger USD backdrop, lower inflationary pressures and decelerating growth momentum.

The undergoing modest correction in prices of property is expected to continue, thanks to the Singaporean government’s property easing measures. The government has stated that they are not expected to relax the measures anytime soon in spite of weak growth.

The Singaporean dollar is expected to depreciate against the US dollar going forward and also against a basket of SGD’s major trading partners, according to a Commerzbank research note. The three most vital currencies in the region in the basket are the Malaysian ringgit, the Chinese yuan and to a smaller degree the Indonesian rupiah.

“We forecast USD-SGD at 1.40 by end-2016”, added Commerzbank.