Singapore, April 25, 2026 – The Singapore dollar faces upside risks against the US dollar as the ongoing crisis in the Strait of Hormuz continues to roil global markets, according to OCBC Bank.
The bank’s foreign exchange analysts noted that the geopolitical tensions have boosted safe-haven demand for the greenback, putting pressure on the SGD. The USD/SGD pair has been trading near recent highs, with the Singapore dollar weakening against its US counterpart.
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Hormuz Crisis Drives Safe-Haven Flows
The crisis in the Strait of Hormuz, a critical chokepoint for global oil shipments, has escalated over the past weeks. Iran and the US have exchanged threats, and shipping disruptions have caused oil prices to spike. This has driven investors toward traditional safe-haven assets, including the US dollar.
Data from the Monetary Authority of Singapore shows the SGD has lost about 1.5% against the greenback since the crisis began. OCBC analysts say this trend could continue if tensions persist.
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“The upside risk for USD/SGD remains elevated,” the bank stated in a research note. “We expect the pair to test the 1.3500 level in the coming weeks if the situation does not de-escalate.”
Oil Price Impact on Singapore Economy
Singapore, as a major oil refining and trading hub, is particularly exposed to the crisis. Higher oil prices increase import costs and could dampen economic growth. The city-state’s trade-dependent economy relies heavily on stable energy prices.
Industry watchers note that the crisis could also affect the Monetary Authority of Singapore’s policy decisions. The MAS uses the exchange rate as its primary policy tool, and a weaker SGD could fuel inflation.
“The MAS may need to adjust its policy stance if the SGD continues to weaken,” said an analyst at a local research firm. “But they are likely to wait for more clarity on the geopolitical front.”
Technical Levels to Watch
From a technical perspective, OCBC identified key resistance at 1.3480 and support at 1.3350. A break above 1.3480 could open the door to 1.3550, the analysts said.
The pair has been consolidating in a narrow range over the past week, suggesting traders are waiting for a catalyst. That catalyst could come from any new developments in the Hormuz crisis.
Market participants are also watching the US dollar index, which has strengthened amid the risk-off sentiment. A stronger DXY typically puts additional pressure on Asian currencies.
What’s Next for USD/SGD
The outlook for USD/SGD remains uncertain, hinging largely on geopolitical developments. OCBC recommends that investors hedge their SGD exposure or consider USD-denominated assets.
“The path of least resistance is for USD/SGD to move higher,” the bank said. “We advise clients to stay cautious and monitor the situation closely.”
The crisis shows no signs of abating, with diplomatic efforts yet to yield results. For now, the safe-haven dollar appears to have the upper hand.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
