Virus Stimulus Package, MAS Eyed

Singapore Dollar, US Dollar, USD/SGD, MAS, Coronavirus – Talking Points

  • Singapore Dollar soared after government announced additional stimulus
  • USD/SGD descended through key support, ending the aggressive uptrend
  • Attention turns to MAS on Monday and how the US Dollar follows stocks

USD/SGD Sank After Singapore Announced Second Stimulus Package, What Now?

The Singapore Dollar appreciated on Thursday with USD/SGD falling -1.13% in the largest single-day drop since June 2016. This followed Singapore’s government announcing a second fiscal stimulus package to help support economic growth that is at risk to the novel coronavirus. The island city-state is heavily reliant on the external sector with global trading activity slowing as countries implement social isolation measures.

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Prior to the stimulus announcement, advanced first-quarter local GDP data showed that growth contracted by the most in a decade. Then it was revealed that industrial production contracted -22.3% m/m in February versus -15.8% expected, the most on record. Year-over-year readings were less dismal, falling -1.1% versus -3.2% anticipated.

To help cope with this, Singapore’s Finance Minister Heng Swee revealed that the additional measures amount to about US$33 billion. Including the first package, total virus relief measures now amount to 11% of local GDP. The government will also draw on national reserves for the first time since the global financial crisis over a decade ago. As a result, the fiscal 2020 budget gap is estimated to rise to 7.9% of GDP from 2.1% prior.

From here, attention turns to the Monetary Authority of Singapore (MAS). Its biannual policy announcement has been moved forward to March 30. The MAS is anticipated to ease after earlier mentioning that it has sufficient room within the currency band to accommodate easing. The Monetary Authority of Singapore conducts policy by managing exchange rates. More gains in equities may pressure USD/SGD lower however.

USD/SGD Sinks as Singapore Delivers Additional Fiscal Stimulus

Singapore Dollar, USD/SGD Outlook: Virus Stimulus Package, MAS Eyed

Chart Created in TradingView

Singapore Dollar Technical Analysis

USD/SGD has closed under rising support “3” on the 4-hour chart below, putting a pause on the aggressive uptrend from earlier this month. The Singapore Dollar faces key support which sits immediately below at 1.4263 to 1.4302. Taking out this barrier could pave the way for a reversal of the prior uptrend. Maintaining the downside bias appears to be falling resistance – blue lines – from the top at 1.4646.

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USD/SGD Daily Chart

Singapore Dollar, USD/SGD Outlook: Virus Stimulus Package, MAS Eyed

Chart Created in TradingView

— Written by Daniel Dubrovsky, Currency Analyst for

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

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