The US Dollar experienced notable weakness against both the Chinese Yuan and the Singapore Dollar, with analysts highlighting shifts in short-term momentum and underlying economic factors supporting Asian currencies. According to United Overseas Bank’s Quek Ser Leang and Lee Sue Ann, the USD/CNH pair dropped sharply to 6.7691, prompting a shift to a downside bias for the US Dollar against the offshore Yuan. The analysts see scope for further USD weakness, though they note that the key support level at 6.7600 is unlikely to be reached immediately. Over the next 1-3 weeks, they expect the pair to trade with a downside bias toward 6.7600, unless the USD rebounds above 6.7860, which would negate the bearish momentum. Short-term resistance levels are identified at 6.7760 and 6.7800, with a breach above these levels indicating stabilization in the decline [1].
Meanwhile, the Singapore Dollar has also shown strength against the US Dollar, with Commerzbank’s Moses Lim reporting a 0.3% fall in USD/SGD to 1.2910, driven by Dollar weakness. The pair has been consolidating within a 1.29–1.30 range since mid-June. Singapore’s robust economic performance, highlighted by advance Q2 GDP growth of 5.7% year-on-year (exceeding the Bloomberg consensus of 5.5%), and benign inflation at 1.8% year-on-year in May, have supported the Singapore Dollar. The Q2 GDP figure was revised up from 6.0% to 6.3% in Q1, implying H1 2026 growth of around 6.0%, which is above the government’s full-year forecast range of 2-4%. This strong growth may prompt the government to revise its 2026 forecast higher when final Q2 GDP data is released in August [2].
Market participants are now awaiting the June CPI release on 23 July, as inflation risks are tilted to the upside if supply bottlenecks and higher crude prices persist. The Monetary Authority of Singapore could consider tightening policy if inflationary pressures increase. Despite external risks such as renewed Middle East tensions and potential impacts on commodity prices and external demand, Singapore’s economy is expected to remain resilient, supported by domestic consumption and AI-driven export growth [2].
Both reports underscore the impact of US Dollar weakness on Asian currencies, with the Yuan and Singapore Dollar benefiting from favorable domestic conditions and shifting market sentiment. The near-term outlook for both USD/CNH and USD/SGD suggests continued downside bias for the US Dollar, barring significant reversals in momentum or unexpected policy shifts [1][2].
CONCLUSION
The US Dollar's recent weakness has bolstered both the Chinese Yuan and Singapore Dollar, with analysts expecting further downside in USD/CNH and continued range trading in USD/SGD. Strong economic fundamentals and benign inflation in Singapore, alongside technical momentum in the Yuan, support the resilience of these Asian currencies. Market attention now turns to upcoming inflation data and potential policy responses.