Singapore Dollar Reaches New Heights Amid Diverging Federal Reserve and Monetary Authority Policies
Singapore Dollar Peaks in 2014 Levels
Singapore's dollar has advanced to its strongest position in almost a decade. As traders weigh the difference between the relatively hawkish stance of the Monetary Authority of Singapore and the US Federal Reserve, the local currency has hit levels last seen against the US dollar in 2014. This, combined with a 1.5% gain this year, places the Singapore dollar second only to Malaysia’s ringgit in Asia.
Monetary Authority of Singapore's Actions
- The Monetary Authority of Singapore holds on to an appreciating bias.
- Recent policy meeting resulted in an upgraded growth forecast from 1-3% to 2-3%.
- The authority focuses on the nominal effective exchange rate known as S$NEER.
Fed Policy and Economic Indicators
The US dollar's recent slump can largely be attributed to Fed Chair Jerome Powell's indication that interest-rate cuts are forthcoming. His comments have shifted market sentiment significantly.
According to FX strategist Christopher Wong from OCBC Bank Singapore, while the dollar-Singapore dollar pair has a heavy bias towards a stronger Singapore dollar, gains might be limited.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.