MAS policy decision of October 14 – OCBC

USD/SGD continued to rise for 5 consecutive sessions. The pair was last at 1,304 1 levels, note OCBC FX analysts Frances Cheung and Christopher Wong.

MAS can surprise with an earlier relaxation

“Hotter US payrolls were the trigger, in line with our view that the corrective rebound may continue. Daily momentum is bullish, while RSI growth has moderated near overbought conditions. Resistance at 1.3060 (50 DMA), 1.31 (38.2% fibo retracement from July high to September low) Support at 1.2980 (23.6% fibo), 1.2940 (21 DMA ).

“S$NEER was last estimated at ~1.79% above our model’s implied mean. The MAS policy decision will be announced on October 14, alongside the third quarter GDP. We expect the MAS to again maintain the policy status quo at the next MPC meeting in October as the dominant appreciation path of the S$NEER policy band remains appropriate.

“But we do not rule out an outside chance that the MAS will surprise with an earlier easing, given that the MAS takes a forward-looking approach to monetary policymaking and that the core CPI disinflation journey remains intact apart from a slight pick-up. in August.”