Two major currency strategy notes published this week point to further US dollar softness, with United Overseas Bank (UOB) and Scotiabank separately flagging upside risks for the Singapore dollar and the euro. The assessments reflect growing conviction that monetary policy divergence between the US Federal Reserve and other central banks will continue to weigh on the dollar.
Singapore dollar outlook from UOB. UOB said the SGD continues to face upside risk against the USD, supported by Singapore’s robust economic fundamentals and the Monetary Authority of Singapore’s exchange-rate-centred policy framework. Unlike central banks that primarily adjust interest rates, MAS manages the Singapore dollar nominal effective exchange rate, known as S$NEER, by adjusting the slope, width, and centre of the policy band. UOB’s note suggests current SGD momentum may persist, and a sustained break above key resistance could open the door to additional gains. The bank did not specify exact targets but said the risk-reward remains tilted toward a stronger SGD.
Scotiabank’s euro view. Scotiabank analysts said on Tuesday that the euro’s bullish trend is targeting the upper 1.17s against the US dollar. The bank highlighted a constructive technical posture for EUR/USD, with momentum indicators and a series of higher daily lows supporting the uptrend. Immediate resistance is in the upper 1.17s, while support is around 1.17. A break above resistance could extend gains, while a failure to hold support could signal a momentum shift.
Common drivers. Both notes point to expectations that the Federal Reserve may begin easing monetary policy, which has narrowed yield differentials and reduced demand for the safe-haven dollar. Eurozone resilience and improving global risk appetite have also supported the euro. Market participants are now watching upcoming US inflation data, Federal Reserve signals, and the MAS’s semi-annual policy review in April as the next catalysts.
Implications for crypto markets. Although the notes focus on fiat currency pairs, the broader macro signal matters for digital assets. A weaker dollar and expectations of Fed easing tend to improve global dollar liquidity and risk appetite, historically a supportive backdrop for Bitcoin and other cryptocurrencies. The dollar’s trajectory remains a key macro variable for crypto market sentiment.
