SGD may weaken against USD more than HSBC previously forecast, although the U.K. bank says it hasn’t turned too bearish on the Singapore currency. The global backdrop has gotten challenging for currencies like SGD that are sensitive to growth and risk sentiment amid worries over the Covid-19 Delta variant and the Fed’s hawkish shift.
Weakness in other Asean currencies is also dragging on SGD, HSBC says, noting that Asean is Singapore’s biggest trading partner. The U.K. bank raises its USD/SGD forecasts to 1.3700 from 1.3200 for 3Q and to 1.3600 from 1.3100 for 4Q. It revises its 1Q 2022 view to 1.3500 from 1.3000 and its 2Q 2022 view to 1.3400 from 1.3000. The currency pair is 0.2% higher at 1.3682.