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SGD to strengthen, USD expected to peak against most currencies in 2023

But the Singapore dollar unlikely to outpace regional and global as much as it did last year

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Jude Chan

Jude Chan

Published Mon, Jan 9, 2023 · 05:50 AM
    • From a top-down perspective, analysts say things are generally seen as changing for the better in 2023 for most EM currencies after a difficult year in 2022.
    • From a top-down perspective, analysts say things are generally seen as changing for the better in 2023 for most EM currencies after a difficult year in 2022. PHOTO: REUTERS

    THE Singapore dollar (SGD), which bucked global currency trends to stand firm against the US dollar (USD) in a year of volatility and uncertainty in 2022, could strengthen further this year as the greenback peaks, market watchers say.

    “The SGD is among the most sensitive to the direction of USD in Asia, so a stalling of USD momentum should allow the SGD to appreciate,” said James Cheo, chief investment officer for South-east Asia, Global Private Banking and Wealth, HSBC.

    “Due to our view that the USD strength has peaked, we believe the SGD has more upside potential for 2023. With inflation remaining sticky and the labour market tight, further policy tightening is likely,” he added.

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