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Singapore Dollar: Range trading after strong NODX – Commerzbank
Commerzbank economists note Singapore’s September NODX surged to its fastest pace since 1980, driven by broad-based gains in electronics and lumpy ship-related exports, yet they expect growth to moderate as base effects toughen and AI investment matures. USD/SGD has drifted lower but remains confined to a tight range since late September, reflecting resilient fundamentals and cautious MAS guidance.
Exports strong but growth to moderate
"September non-oil domestic exports (NODX) exceeded expectations and surged 68.4% yoy (Bloomberg consensus: 32.2%) vs 46.1% in August, the strongest growth since February 1980. The increase was broad-based across electronic and non-electronic exports, although the latter was boosted by volatile components."
"Enterprise Singapore highlighted that the non-electronic sector’s outperformance was “primarily due to the lumpy exports of structures of ships and boats”. NODX rose around 27.5% in the first nine months of the year, well above the government’s full-year forecast of 14-16%."
"Looking ahead, NODX should remain resilient in the near term, supported by the electronics sector. However, increasingly challenging base effects, a maturing AI investment cycle and capacity constraints could moderate growth ahead."
"Continued weakness in chemicals represents an additional headwind, while the boost from lumpy exports of ships and boats is unlikely to be sustained. As a result, we should expect a moderation in the coming months."
"In FX, USD/SGD fell 0.2% to 1.2790 last Friday and dipped 0.1% last week. The pair has remained in the 1.2740-1.2870 range since late September."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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