The Singapore Consumer Price Index (CPI) for December is 1.2%, matching what experts expected. This number shows how consumer prices have changed over the year and reflects the cost of everyday goods and services in Singapore. A steady CPI indicates stable inflation, which may influence future decisions by the Monetary Authority of Singapore (MAS). Economists analyze such data to understand the current economy and predict future trends.

Importance of CPI Data

CPI data is crucial for local decision-makers, traders, and those tracking inflation to adjust their strategies. It acts as an essential economic indicator, offering insights into consumer behavior and signaling possible economic growth or problems. Future economic events and data will continue to shape Singapore’s financial landscape and the global economy. The December 2025 CPI figure of 1.2% aligns perfectly with expectations, reducing the chances of market fluctuations. This confirms that inflation in Singapore is under control, suggesting current market trends are likely to remain stable. With this steady inflation data, the Monetary Authority of Singapore (MAS) has little reason to change its currency policy soon. Recall that during its last meeting in October 2025, the MAS decided to maintain a gradual appreciation of the Singapore dollar. Current data makes any policy changes unlikely at the next meeting in April.

Global and Local Economic Context

Looking at the global situation, recent US inflation data showed a slight decrease to 2.8%. This lowers the chances of sudden interest rate changes by the US Federal Reserve, helping to stabilize capital flows and keep currency markets, including the Singapore dollar, calm. For derivative traders, this stable environment suggests low volatility will continue. One-month implied volatility on USD/SGD options is currently at about 3.5%, near historical lows. This scenario favors trading strategies that benefit from steady price movements, like selling option straddles for premium collection. We expect no significant surprises in the Singapore dollar in the coming weeks. This forecast is backed by Singapore’s fourth-quarter 2025 GDP data, which showed a moderate year-on-year growth of 2.1%. The combination of steady growth and low inflation is often referred to as a “Goldilocks” scenario, meaning central bank actions are less likely. Therefore, we anticipate the Singapore dollar will trade within a stable range against its major partners. Create your live VT Markets account and start trading now.

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