GBP/USD dipped to about 1.3380, then recovered to around 1.3510, up 0.35% on the day. It has risen more than 350 pips from near 1.3160 in early April, and has retraced roughly half of the drop from about 1.3870.

A US blockade of the Strait of Hormuz after failed peace talks in Pakistan weighed on risk appetite early on Monday. Later, the US Dollar eased as markets anticipated a possible resolution, helping GBP/USD to regain 1.3500.

Tuesday brings the March US Producer Price Index (PPI), expected at 1.2% month-on-month versus 0.7% in February. The year-on-year PPI is forecast at 4.6% versus 3.4%, alongside five Federal Reserve speeches from Goolsbee, Barr, Barkin, Collins, and Paulson.

UK CPI is expected to rise to between 3% and 3.5% over coming quarters due to higher fuel and utility costs. This follows a prior move towards the 2% target before the conflict.

GBP/USD trades near 1.3513, above the 50-day EMA at 1.3395 and the 200-day EMA at 1.3367. Stochastic RSI is near 71, with support levels around 1.3395 and 1.3367.

We remember watching the pound recover to 1.3500 in April 2025, even as the US blockade of the Strait of Hormuz began. That market optimism about a quick resolution proved temporary, as the stagflationary risks discussed at the time took hold and weighed on the UK economy throughout the past year. Today, with GBP/USD hovering near 1.2850, our focus has shifted from geopolitical hope to the hard reality of stubborn inflation.

The inflation shock from the 2025 conflict has left a long tail that we are still managing. The latest March Consumer Price Index data showed US inflation remains sticky at 3.1%, while the UK’s figure came in at 3.2%, both stubbornly above the 2% target. Consequently, both the Federal Reserve and the Bank of England have signaled that the rate cuts we had anticipated for this quarter are likely delayed.

Tensions in the Strait of Hormuz have eased from the direct blockade of 2025, but they have not disappeared, with sporadic shipping disruptions still a concern. This persistent risk keeps a floor under energy prices, with Brent crude recently trading back above $92 a barrel. This complicates the path back to lower inflation and keeps the risk of another price spike in our minds.

Given this backdrop of sticky inflation and central bank hesitation, we should position for continued range-bound trading marked by sharp bursts of volatility. Using options to buy straddles or strangles ahead of key inflation reports could be a good way to play the expected price swings. This allows us to profit from a significant move in either direction without having to guess the outcome of finely balanced policy decisions.

For those of us who believe the UK’s economic challenges will ultimately limit the pound’s upside near the 1.3000 level, selling out-of-the-money call options on GBP/USD offers a way to generate income. On the other hand, with the market highly sensitive to any shift from the Fed, buying short-dated puts can serve as a cost-effective hedge. This protects against any hawkish surprises that could send the dollar sharply higher and push the pound back toward its yearly lows.

OCBC strategists Sim Moh Siong and Christopher Wong expect the Monetary Authority of Singapore (MAS) to tighten policy on 14 April 2026. They anticipate MAS will raise the slope of the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) policy band to address imported inflation.

They note market expectations are already skewed towards tightening, so attention is on which policy levers MAS uses and the statement’s tone. A more hawkish tone could keep the S$NEER near the top of its band and trigger modest, immediate downside in USD/SGD, assuming broader USD moves stay balanced.

Mas Policy Levers And Market Tone

If MAS uses more balanced messaging, they expect the USD/SGD reaction to be more muted. They also set out technical levels for USD/SGD, with resistance at 1.2780, 1.2810, and 1.2840/50.

They identify key support at 1.2710, with the next support at 1.2620 if there is a decisive break lower. The resistance levels cited include the 38.2% and 50% Fibonacci retracements, plus the 21, 100, and 200-day moving averages.

Our base case is for the Monetary Authority of Singapore to tighten policy today by increasing the slope of the S$NEER policy band. This move is aimed at countering rising imported inflation, especially as the latest data showed the first-quarter import price index rose 2.5%, its fastest pace in over a year. We expect this will put downward pressure on the USD/SGD pair.

Looking back from 2025, we saw how aggressively central banks, particularly the US Federal Reserve, acted against the inflation surge in 2022. The current situation, with Brent crude futures hovering above $95 a barrel for the past month, presents a similar challenge for Singapore’s import-reliant economy. This historical context reinforces our view that the MAS will act decisively to strengthen the currency.

Usdsgd Trading Strategy And Key Levels

Given that market expectations are already leaning heavily towards a tightening, the immediate reaction will hinge on the tone of the policy statement. We see implied volatility on one-week USD/SGD options has already climbed to 8.2%, reflecting market anticipation. Therefore, a simple increase in the slope without a hawkish message may not cause a significant move.

If the MAS delivers a hawkish statement alongside the tightening, we should prepare for a test of key support for USD/SGD at 1.2710. A break below this level could be a trigger for buying short-dated USD/SGD put options to capitalize on further downside towards 1.2620. This would signal a strong commitment from the MAS to let the Singapore dollar appreciate more quickly.

However, if the statement is more balanced and simply meets expectations, we might see a muted reaction or a brief relief rally in USD/SGD. In this scenario, traders could consider selling call options with strikes near the 1.2780 to 1.2810 resistance zone. This strategy would benefit from both the price failing to rise and the expected drop in option volatility after the event.

Over the coming weeks, our broader strategy should be to sell into any strength shown by the USD/SGD pair. The fundamental policy direction is towards a stronger Singapore dollar to combat inflation. We will view any rallies towards the 1.2840/50 resistance area as opportunities to initiate bearish positions or add to existing ones.

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Silver (XAG/USD) recovered some ground on Monday but was set to end the day down 0.33% after a weekend gap lower linked to negative news on the US-Iran conflict. At the time of writing, it traded at $75.58 after rebounding from a daily low of $72.61.

Silver faced resistance at the 100-day Simple Moving Average (SMA) of 76.09 and found support at the 20-day SMA of 73.28. A four-day low of $72.61 raised the risk of further declines, even with price ending above $75.50.

Momentum And Key Catalyst

The Relative Strength Index (RSI) moved sideways near the neutral level, suggesting limited momentum. Traders were awaiting a potential catalyst from the US Producer Price Index (PPI) release on Tuesday.

If the price rises above the 100-day SMA, levels to watch include $77.98, the March 3 low turned resistance, and the 50-day SMA at $79.21. If it falls below the 20-day SMA, targets include the April 2 low of $69.58 and then $60.95, the March 23 cycle low.

Looking back at the situation around this time in 2025, we saw silver caught in a tight range following a geopolitical scare. The price was stuck between its 100-day moving average at $76.09 and its 20-day average at $73.28. This technical setup from last year provides a clear map for how we should be positioned today.

For derivative traders now, a break below that old support level of $73.28 would be a significant bearish signal. We saw a similar pattern in late 2025 when unexpectedly strong US jobs data boosted the dollar, pushing silver down nearly 10% in the following month. Buying put options or establishing bear put spreads would be the logical response to capitalize on a potential move toward the $69.58 target.

Options Positioning And Breakout Levels

Conversely, a sustained move above the $76.09 resistance level should be seen as a strong bullish trigger for buying call options. Current industrial demand reinforces this view, with recent reports showing silver consumption in the solar panel and 5G technology sectors is up 8% year-over-year for the first quarter of 2026. This fundamental strength could easily propel prices toward the higher target of $77.98.

The market is currently showing signs of indecision, much like the neutral RSI period we observed last year. The CBOE Silver Volatility Index (VXSLV) is hovering near 34, suggesting traders are anticipating a significant price swing in the near future. All eyes are on this week’s US Producer Price Index data, which will likely be the catalyst that breaks the deadlock.

Therefore, we should use those key price levels from 2025 as our guideposts for the coming weeks. Traders who are uncertain of the direction but are confident a large move is coming could consider long strangles to profit from a breakout. The strategy is to wait for a confirmed daily close outside of the $73.28 to $76.09 range before building a directional position.

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USD/JPY moved in a wide range on Monday, rising to about 159.86 before easing to around 159.35, close to flat. Since early April it has traded in a band of roughly 200 pips, between about 158.00 and 160.00.

Focus is on the Bank of Japan ahead of the 27–28 April meeting, as market talk of a rate rise increases. Japan imports nearly all of its crude oil, and the effective closure of the Strait of Hormuz since late February has pushed energy costs higher.

Dollar Softens As Markets Watch Iran

The US Dollar softened as risk appetite improved, with attention on the Iran conflict and hopes of a resolution. On Tuesday, March PPI is forecast at 1.2% month-on-month versus 0.7% in February, and 4.6% year-on-year versus 3.4%, alongside speeches from Goolsbee, Barr, Barkin, Collins, and Paulson.

On the five-minute chart, price is below the day’s open at 159.73, with the Stochastic RSI falling from near 90 to the high-30s. On the four-hour chart, price remains above the 200-period EMA at 158.51, while Stochastic RSI is 74.46.

The yen is influenced by Japan’s economy, Bank of Japan policy, yield gaps with the US, and risk sentiment. Ultra-loose policy between 2013 and 2024 weakened the yen, and the 2024 shift away from it has narrowed the gap with US yields.

Looking back to April 2025, we saw USD/JPY struggling to break the significant 160.00 level. Speculation was high that the Bank of Japan would raise rates that month due to rising energy costs linked to Middle East tensions. This created a ceiling for the pair as the market anticipated a stronger yen.

Intervention Risk Rises Near Old Highs

That 160.00 level was eventually breached later in 2025, which prompted direct intervention from Japanese authorities to buy yen and push the dollar down. However, the move was temporary because the fundamental driver, the interest rate difference between the U.S. and Japan, remained overwhelmingly wide. The Bank of Japan’s actions have since been seen as only slowing the yen’s depreciation, not reversing it.

Fast forward to today, April 14, 2026, and the pair is trading near 165, showing the underlying upward pressure has continued. The U.S. Federal Reserve has only recently begun a slow cutting cycle, with its policy rate at 4.75%, while the Bank of Japan has moved incredibly slowly, bringing its rate to just 0.25%. This gap continues to make holding U.S. dollars far more profitable than holding Japanese yen.

This history suggests that while the fundamental uptrend remains strong, the risk of sudden, sharp pullbacks from intervention is very high as we approach old highs. Derivative traders should therefore focus on volatility, perhaps by buying yen call options or USD put options to profit from a potential surprise intervention. These options provide a way to bet on a sudden yen strengthening with limited risk.

At the same time, the powerful carry trade—borrowing cheap yen to buy high-yielding dollars—is still the dominant strategy. The yield on the 10-year U.S. Treasury note is currently around 4.1%, while the Japanese equivalent sits at only 0.9%, making the dollar attractive. Traders can use currency futures to execute this long-USD/short-JPY position while collecting the positive swap, or interest rate differential.

In the immediate weeks ahead, we will be watching the upcoming U.S. inflation report for any signs of slowing that might accelerate Fed rate cuts. The Bank of Japan also meets on April 28, and while no major policy shift is expected, traders will scrutinize the language for any stronger commitment to normalizing policy. The market remains skeptical that the BoJ will act aggressively enough to close the rate gap meaningfully this year.

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NZD/USD rose on Monday, 13 April, moving back towards 0.5880 as broad US Dollar weakness set the tone for trading. The move was driven more by a softer dollar than by New Zealand-based factors.

Reports said Iran–US talks had failed and that President Donald Trump was sending the US Navy to close the Strait of Hormuz. The Middle East conflict remained in focus, with attention on the Strait and mixed diplomatic messages from Iran.

Dollar Safe Haven Demand Fades

Even with these tensions, the US Dollar struggled to keep safe-haven support. Trading flows moved away from the dollar as markets reduced earlier demand linked to risk concerns.

Looking back to April of last year, we saw the US Dollar weaken even when faced with significant geopolitical risk in the Middle East. The market chose to fade the safe-haven bid, allowing the NZD/USD to push higher. This indicated a shift where underlying economic data was becoming more important than headline risks.

This trend has become more pronounced over the past year. Recent data from March 2026 showed US core inflation cooling slightly to 2.8%, increasing the probability of a Federal Reserve rate cut later this year. This has kept the US Dollar Index (DXY) suppressed, struggling to hold gains above the 103.00 level it briefly touched in late 2025.

Meanwhile, the Reserve Bank of New Zealand has signaled it will hold its official cash rate steady at 5.5% through the second half of 2026 to combat stubborn domestic price pressures. This growing policy divergence between the two central banks provides a fundamental reason for NZD strength, unlike last year when the rally was mostly about USD weakness. A 3.5% rise in global dairy prices since January 2026 also adds direct support to the New Zealand economy.

Options Positioning For Further Upside

For derivative traders, this environment suggests positioning for further NZD/USD upside. We should consider buying call options with strike prices above the current spot, perhaps targeting the 0.6200 level with expirations in June or July. This strategy provides a fixed-risk way to capture potential gains if the pair continues to climb.

Implied volatility for the NZD/USD pair is currently trading near its 12-month lows, around 8.9. This makes long options strategies, like buying calls or setting up bull call spreads, relatively inexpensive. Low volatility suggests the market is not pricing in any major surprise shocks, making it a favorable time to place directional bets.

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EUR/USD rose on Monday as the US Dollar fell to a six-week low, with the US Dollar Index (DXY) at 98.36, down 0.29%. The pair traded at 1.1757–1.1758, up 0.32%.

Improved risk mood supported the euro, with the pair near the 1.1800 level. The two-week ceasefire was described as fragile, with the US and Iran possibly returning to talks after a meeting last Saturday.

Strait Of Hormuz Tensions

Talks in Pakistan lasted 21 hours. Iran was unwilling to give up its nuclear programme and control of the Strait of Hormuz, and the White House then imposed a blockade in the Strait of Hormuz.

Donald Trump said Tehran wants a deal. The New York Post reported Iran was studying a halt to uranium enrichment, a US condition for ending the war, and EUR/USD rose after the report.

US Existing Home Sales fell to a nine-month low of 3.98 million in March, down 3.6% month-on-month. In Hungary, Peter Magyar won by a landslide over Viktor Orban, who had been in power for 16 years.

ECB Vice President Luis de Guindos said the conflict impact depends on its duration, and ECB’s Vujcic said energy prices are within the baseline. Markets were watching March PPI, the ADP Employment Change 4-week average, Fed speakers, and ECB remarks from Philip Lane (twice) and Mario Cipollone.

How The Macro Picture Changed

We remember looking at the market in 2025 when a fragile truce in the Middle East and a weak US housing report pushed the EUR/USD toward 1.1800. Today, on April 14, 2026, the landscape is entirely different, with the pair struggling to hold ground around 1.0750. The dynamics that drove the dollar down last year have clearly reversed course.

The US Dollar Index (DXY), which had fallen to the 98 level, is now trading firmly above 105.5. This reversal is largely due to divergent central bank policies, with recent US inflation data for March 2026 coming in at a stubborn 3.4%, forcing the Fed to maintain a hawkish stance. Meanwhile, with Eurozone inflation having cooled to 2.2%, the European Central Bank is now openly discussing a rate cut for this summer.

The geopolitical focus has also shifted significantly since the tensions in the Strait of Hormuz dominated last year’s news. While the pro-EU political changes in Hungary offered the Euro temporary support in 2025, broader economic fundamentals are now the main driver. The market appears less sensitive to Middle East headlines and more focused on interest rate differentials between the US and Europe.

Given this context, traders should consider strategies that benefit from a stronger dollar and weaker euro. Buying put options on the EUR/USD with expiration dates in June or July can offer a way to profit from a potential ECB rate cut. This approach provides downside exposure while clearly defining the maximum risk involved in the trade.

For those anticipating increased market movement around the next central bank meetings, a long straddle could be effective. This strategy involves buying both a call and a put option, profiting if the EUR/USD makes a significant move in either direction. With US employment data and Eurozone inflation figures due in the next few weeks, implied volatility is likely to rise, creating opportunities for this kind of play.

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HSBC Asset Management says China’s technology sector remains a key equity theme, even as attention moves towards tensions in the Middle East. It links this to gains in the Shenzhen Chinext index, which it says are supported by advanced manufacturing, green energy and semiconductors.

Over the past two years, the Shenzhen Chinext index, often called the “China Nasdaq”, delivered a double-digit return. China’s latest five-year plan put tech capability as a priority, alongside higher productivity and economic self-reliance.

China Technology Sector Outlook

The plan is part of efforts to rebalance the economy and build domestic sources of growth. The article says tech, AI and other innovation-led industries remain central to China’s equity market outlook.

The article was created with the help of an Artificial Intelligence tool and reviewed by an editor.

The long-term focus on China’s innovation-led sectors remains relevant. We recall the analysis from 2025 which highlighted the ChiNext index’s stellar performance during the 2023-2024 period, driven by strong policy support. This foundation continues to influence our current market view.

Given the ChiNext index has posted a steady 4% gain so far this year, the underlying bullish trend persists. This sustained momentum suggests that buying call options on ChiNext-tracking ETFs could be a viable strategy to capture further upside. We see this as a continuation of the theme that gained traction over the last few years.

Options Strategies For Chinext

Recent economic data reinforces this positive outlook, with China’s Q1 2026 GDP growing by 4.9% and March industrial production figures showing particular strength in high-tech manufacturing. This fundamental support may make selling cash-secured puts an attractive strategy for traders willing to acquire shares on a potential dip. This suggests a solid floor is forming under these key sectors.

We have observed that implied volatility on these indexes has cooled from its highs in late 2025. This environment makes purchasing options less expensive than it was previously. Therefore, initiating long call positions to bet on a rise in the coming weeks is more cost-effective now.

The government’s commitment, reaffirmed during the March 2026 policy meetings, to cultivating “new quality productive forces” provides a significant tailwind. This explicit backing for AI and semiconductors reduces policy risk and strengthens the case for continued investment. It signals that the government’s priorities are unchanged.

Considering the steady but not explosive growth this year, we might also look at bull call spreads. This approach would help finance the purchase of a call option by selling another one at a higher strike price. It lowers the upfront cost while still profiting from a moderate rise in the ChiNext index.

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USD/CAD fell about 0.40% on Monday to near 1.3790, as the Canadian Dollar rose with higher oil prices and a softer US Dollar. The pair broke below 1.3840, made a fresh weekly low, and reversed most of the early April move towards 1.3950, setting up a second straight weekly drop.

WTI jumped as much as 9% to above $105 per barrel after President Donald Trump announced a US blockade of the Strait of Hormuz. The route has been effectively closed since late February, after talks between the US and Iran in Pakistan collapsed.

Energy Prices Lift The Canadian Dollar

Higher energy prices supported the Canadian Dollar as the Bank of Canada held its overnight rate at 2.25% in March. The next BoC decision is due on 29 April with the Monetary Policy Report.

US March PPI is forecast at 1.2% month-on-month (0.7% prior) and 4.6% year-on-year (3.4% prior). The data comes ahead of the 28–29 April FOMC meeting.

Technically, USD/CAD traded near 1.3792, below the 5-minute 200-EMA at 1.3819 with Stochastic RSI near 84. On the 4-hour chart it sat near the 200-EMA at 1.3791, with support at 1.3790 and 1.3680, while the daily chart showed support at the 50-day EMA (1.3773) and resistance at the 200-day EMA (1.3815).

Looking back at the situation from April 2025, we see a market driven by a sudden geopolitical crisis and spiking oil prices. Today, the environment is notably different, with geopolitical tensions in the Strait of Hormuz having eased significantly over the past year. This relative calm has brought stability to energy markets, which dramatically changes the outlook for the Canadian dollar.

Policy And Volatility Shift Trading Playbooks

The surge in West Texas Intermediate crude to over $105 per barrel that we saw in 2025 is a distant memory. As of this week, WTI is trading in a more stable range around $84.50 per barrel, reflecting a balanced global supply picture rather than the conflict-driven panic of last year. This removes the extreme tailwind that was boosting the loonie, suggesting that any CAD strength will need to come from other fundamental factors.

Central bank policy has also evolved considerably since the Bank of Canada was holding rates at 2.25% last spring. With Canadian inflation having cooled to a 2.7% annual rate as of the last report, the BoC is now in a holding pattern at 4.50%, with markets pricing in the possibility of a rate cut this summer. This contrasts with the uncertainty of 2025, when rising energy costs were threatening to complicate monetary policy.

The USD/CAD exchange rate, currently near 1.3620, reflects this new reality, trading well below the volatile 1.3790 levels seen during the height of the crisis in 2025. The US Producer Price Index data that caused concern last year is now showing a more subdued trend, with the latest figures indicating a 2.1% year-over-year increase. This suggests inflationary pressures from the production side are contained, giving the Federal Reserve more flexibility.

For derivative traders, this calmer environment suggests a shift away from strategies that thrive on high volatility. Last year, buying options like straddles on USD/CAD would have been profitable due to the large price swings, but now, selling volatility appears more attractive. We should consider strategies like writing covered calls against existing USD/CAD long positions or selling cash-secured puts at levels we find attractive to enter a long position, such as near the 1.3500 mark.

Given the potential for the Bank of Canada to cut rates ahead of the Federal Reserve, the Canadian dollar’s upside seems limited. This outlook makes bearish or neutral-to-bearish strategies on the CAD more compelling. Traders could look at buying USD/CAD call spreads to profit from a gradual grind higher in the currency pair, which limits risk while capturing potential upside driven by monetary policy divergence.

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OCBC strategists Sim Moh Siong and Christopher Wong expect Asian foreign exchange to start the week weaker. They link this to renewed geopolitical uncertainty, firmer crude prices, weaker risk appetite and demand for the US dollar.

They flag high-beta and net oil-importer currencies as more exposed, including KRW, THB, PHP and INR. They expect lower-beta currencies such as CNH and SGD to be more resilient.

Limited Hormuz Transit Resumes

They note that limited transit through the Strait of Hormuz has resumed. This may reduce the chance of markets pricing in the most severe disruption scenario, pointing to a softer open rather than a disorderly sell-off.

If conflict lasts and oil prices stay elevated rather than surge, they expect a move towards terms-of-trade differences. They prefer AUD over EUR and remain defensive on oil-importing Asian currencies, including KRW, INR, THB and PHP.

Given the recent rise in Brent crude to over $95 a barrel and the US Dollar Index pushing past 106.5, we expect a weaker start for many Asian currencies. This environment of geopolitical uncertainty is creating defensive demand for the dollar. We see this as a direct echo of the patterns observed during the Middle East tensions back in 2025.

Last year, we saw how high-beta, net oil importers like the Korean won and Thai baht underperformed significantly when oil prices became sticky. South Korea’s heavy reliance on energy imports, for instance, caused the won to weaken past 1,380 against the dollar during that period. Traders should consider buying puts on currencies like the KRW, THB, and INR to hedge against further downside in the coming weeks.

Favor Aud Over Eur

Conversely, we favor energy exporters like the Australian dollar, which benefits from higher commodity prices, especially when compared to energy-importing blocs like the Eurozone. Australia’s trade surplus just beat expectations last month, widening to A$12 billion on the back of strong LNG and coal exports. This reinforces our view to look at strategies like call spreads on AUD/EUR, anticipating further divergence.

The Chinese yuan and Singapore dollar should prove more resilient in this environment, much like they did in 2025. Singapore’s strong monetary framework and China’s managed currency regime provide a buffer against this type of external shock. These are not the currencies we would be looking to short right now.

The key is that oil prices seem sticky rather than spiking uncontrollably, as major shipping lanes remain open, albeit with higher insurance costs. This suggests a gradual grind rather than a market panic, making longer-dated options more attractive than short-term gambles. We will be watching headlines closely for any signs of de-escalation, which could be a trigger to take profits on these defensive positions.

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DBS Group Research economist Philip Wee expects the Monetary Authority of Singapore to reverse earlier easing by normalising the SGD Nominal Effective Exchange Rate (NEER) policy band. He expects MAS inflation forecasts to rise due to an energy shock, and notes the Singapore dollar’s trade-weighted level is above the band’s mid-point.

Market volatility is expected to return after the failure of Sunday’s Islamabad Summit between US Vice President J.D. Vance and Iranian Speaker Mohammad Bagher Ghalibaf. The report links this to hopes of de-escalation in the US-Iran conflict fading.

Hormuz Supply Shock Drives Policy Shift

The report says Deputy Prime Minister Gan Kim Yong described the Hormuz chokepoint as the worst since the 1973 oil embargo. It adds that this is treated as a supply shock rather than a normal price move.

It forecasts MAS will reverse two slope reductions made in January and April 2025. It predicts MAS will raise the core inflation forecast to 1.5–2.5% from 1–2%, and lift the CPI-All Items projection.

It states the SGD NEER is about 1.8% above its mid-point. It adds USD/SGD still follows the global US dollar direction.

We believe the Monetary Authority of Singapore (MAS) is about to tighten its policy by strengthening the Singapore dollar. This comes after the breakdown of the Islamabad Summit, which has pushed global energy prices higher. The situation is being viewed as a serious supply shock, meaning the central bank will likely act to shield the economy from imported inflation.

Trade Ideas For A Stronger Singapore Dollar

This move would be a direct reversal of the easing we saw in January and April of last year, 2025. Recent data from March 2026 showed Singapore’s core inflation hitting 2.1% year-on-year, already touching the upper end of the MAS’s old forecast range. With Brent crude trading above $115 a barrel since President Trump’s blockade decision, we expect the MAS to officially raise its inflation forecasts at the next meeting.

We saw a similar playbook back in 2022 when the MAS aggressively tightened policy multiple times to combat inflation from the Ukraine conflict energy shock. The Deputy Prime Minister’s comments framing the Hormuz situation as the worst since 1973 suggest a similarly strong response is coming. Traders should prepare for the SGD NEER policy band to be re-centered or for its slope to be steepened to allow for faster appreciation.

For derivatives traders, this signals an opportunity to position for a stronger Singapore dollar in the coming weeks. The trade-weighted SGD is already trading firmly in the upper half of its policy band, around 1.8% above the midpoint. This shows underlying strength even before any official policy shift.

However, the US dollar is also gaining strength as a safe-haven asset, with the DXY index surging past 108. This means that while the SGD is likely to appreciate, its gains against the USD might be limited. The downward move in the USD/SGD pair could be a grind rather than a sharp drop.

Therefore, traders could consider buying SGD call options against a basket of other currencies, such as the Euro or Yen, which do not have the same safe-haven demand. For those focused on the main pair, selling low-premium, out-of-the-money USD/SGD call options could be a way to express the view that significant upside is capped. This strategy benefits from the expected strength in the SGD while acknowledging the powerful opposing force from the global USD.

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