India Trade Deal Lifts Singapore Dollar as Geopolitical Tensions Ease

MevTears · 2026-02-12T11:16:01+00:00

The U.S.-India trade agreement has boosted the Singapore Dollar, reflecting improved market sentiment in Asia. A reduction in tariffs signals eased trade tensions, leading to increased demand for regional currencies, while potential resistance points for the USD/SGD pair are identified.

MevTears

2026-02-12 11:16:01

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The U.S.-India trade agreement has triggered a notable uptick in the Singapore Dollar, reflecting broader improvements in market sentiment across Asian currency markets. The policy shift, which involves a reduction of American tariffs on Indian goods to 18% from the previous 25%, signals a meaningful easing of trade tensions that has supported demand for regional currencies.

The currency response underscores how geopolitical developments and policy shifts directly influence forex movements. When trade tensions ease, investors typically reassess risk levels and rotate capital into higher-yielding or risk-adjacent assets, bolstering demand for Asian currencies including the Singapore Dollar and the Indian Rupee.

Market Positioning and Technical Outlook

According to data from LSEG, the U.S. Dollar retreated 0.1% against the Singapore Dollar following the trade agreement announcement, with spot prices settling near 1.2710. The movement, though modest, reflects a broader softening of the greenback’s recent momentum.

OCBC Bank’s foreign exchange strategists have outlined a constructive outlook for the currency pair, indicating that stabilizing risk sentiment and decelerating U.S. Dollar strength could allow the USD/SGD exchange rate to consolidate. The research team projects the currency pair will remain bounded between 1.2680 and 1.2760 in the near term, suggesting limited volatility as markets digest the policy developments.

What This Means for Singapore Dollar Investors

If the U.S.-India trade framework holds and diplomatic efforts continue to reduce tariff friction, the Singapore Dollar could sustain its recent resilience. However, the technical ceiling remains the 1.2760 level, where resistance may emerge if broader market conditions shift. The India trade agreement represents a positive catalyst for regional currency appreciation, though macro factors including U.S. monetary policy will remain critical to Singapore Dollar momentum going forward.

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