Singapore Dollar Steadies Ahead of Fed Decision, With a Hold Now the Favorite

The Singapore dollar moved sideways against the U.S. dollar during the Asian session as attention turned to the Federal Reserve's policy decision, according to the Wall Street Journal. The same report said higher oil prices could weigh on the Singapore dollar.

The Fed's policy meeting runs Tuesday and Wednesday, October 27-28, and the Fed's calendar lists a press conference on October 28. The central question is narrow. Policymakers raised rates in September, their first increase since 2023, and the market is now asking whether they will hold steady in October.

The federal funds rate is the overnight rate at which banks lend reserves to one another. The Fed steers it through a target range, much as a thermostat is set to a band rather than a single number. Bloomberg reported that the upper bound of that range was 4% in October, and Bloomberg Economics forecast the rate would still be at 4% at the end of 2026. A basis point is one hundredth of a percentage point, so a quarter-point move would be 25 basis points.

Pricing has moved toward a hold. Reuters reported on October 14 that traders assigned a 65% probability to no change at the October meeting, up from 53% a month earlier. Bloomberg reported on October 16 that investors had pared their bets on a rate hike at that meeting. By October 25, Bloomberg described the Fed as looking set to pause after September's increase, with inflation still above target.

A 65% probability is a market estimate, not a commitment. It also leaves 35% on outcomes other than a hold, which is a meaningful share for a meeting this close.

The dollar has been firm while those bets were being unwound. On October 26 it slipped but stayed near a one-month high. Reuters commentary published in late September noted that many Asian currencies weakened significantly against the dollar during the Fed's tightening period. That history explains why regional currency desks treat each Fed decision as a live event rather than a formality.

For savers and borrowers, a hold leaves the policy rate where it is, so the direction of travel matters more than any single decision. Deposit rates, adjustable-rate mortgages and credit lines tend to respond to where the benchmark goes next. The broader context here is that dollar moves matter to Asian importers and to borrowers with dollar-denominated debt, and higher oil prices complicate the picture for oil-importing economies such as Singapore.

The next steps are already on the calendar. The Fed lists November 18 as the release date for the minutes of the October 27-28 meeting, which will give a fuller account of the internal discussion than the statement and press conference do. The next scheduled meeting is December 8-9, 2026.

In my view, the statement and the October 28 press conference will carry most of the new information. The minutes will show how divided or unified the committee was, and the December meeting will show whether the market's read on the path holds. Until then, the pricing is a snapshot of expectations, and those expectations have already shifted twice this month.