SGD rates to outperform USD on Fed rate normalisation

SGD rates is expected to outperform USD rates on the back of the expectation of an improvement in US economic data in H2. 

"While USD-SGD is likely to head higher in Q3, the FX impact is likely to be marginal because of a lower correlation between the USD-SGD rates differential and FX forward points. Analysts expect the spread between USD and SGD 1Y, 2Y forward rates to test the zero bound as  move towards the first Fed rate hike", said Standard Chasrtered in a report on Tuesday.