Part 2/9:
The decisive actions by MAS resulted in a notably strong Singapore dollar, making it an attractive asset for investors seeking stability and value amid turbulent markets. However, as markets move into 2023, signs suggest that this bullish trend may be starting to unwind.
Signs of a Trade Reversal
In the early months of 2023, the Singapore dollar’s gains against the US dollar have moderated, rising at a slower pace compared to some of its regional peers. This deceleration hints at a potential shift in market sentiment, possibly signaling the conclusion of Singapore’s rate hiking cycle. Several indicators, including policy hints from MAS, suggest that the central bank may be in the final stages of tightening monetary policy, or at least close to it.