Singdollar Catches Bid After MAS Tighten Policy To Tame Inflation

Spot USD/SGD takes a nosedive after the release of a monetary policy statement from the MAS, who decided to "slightly raise" the appreciation rate of their S$NEER policy band, while keeping its width and centre level unchanged.

• The MAS explained that the decision was motivated by "rapidly accumulating external and domestic cost pressures" and "builds on the pre-emptive shift to an appreciating stance in October 2021."
• Today's round of policy tightening comes on the heels of better-than-expected CPI data released on Monday. Singapore's consumer prices rose 4.0% Y/Y (est. +3.7%) in December, with core prices up 2.1% Y/Y (est. +1.8%).
• Spot USD/SGD operates -35 pips at SGD1.3428 at typing, after hitting its lowest point since Oct 21. Bears look for a deeper sell-off past the low print from that day, located at SGD1.3419. A clean break would open Sep 10 low of SGD1.3380. On the flip side, bulls would be pleased by a rebound above Jan 18 high of SGD1.3518.