- Singapore dollar (SGD) rises across the week
- MAS monetary policy keeps SGD elevated
- US Dollar (USD) rises against major peers
- Nvidia earnings could impact sentiment
The US Dollar Singapore dollar (USD/SGD) exchange rate rose on Friday after two days of losses. The pair was 0.28% lower in the previous session, settling on Thursday at 1.30. At 21:00 UTC, USD/SGD trades +0.18% at 1.3024 and is in a range of 1.2951 and 1.3040. The pair fell 0.27% across the week.
The Singapore Dollar continues to trade at levels last seen in 2014. It Is also close to record levels against the Indonesian Rupiah and not far from a record level against the yen.
The Singaporean dollar is being lifted by the monetary policy regime, which uses its exchange rate rather than borrowing rates as its key lever.
Economic weakness in China, Singapore’s largest trading partner, is lifting the SGD on a relative basis, and so are tensions between Beijing and Washington.
The stronger SGD is helping to keep inflation under control, but if it becomes too strong, exports could be priced out of the market.
The US Dollar rose across the board on Friday. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 101.19 at the time of writing, up 0.08% after yesterday’s losses. The USD fell -0.5%
The US dollar is holding steady, recovering from earlier losses as the market digested a mixed jobs report.
While fewer jobs were created in August than expected, the unemployment rate also ticked lower. The non-farm payroll report showed that 142,000 jobs were added in August below the 160,000 forecast. The September reading was also downwardly revised to just 89,000 from an already low 111,000.
However, the unemployment rate ticked a little lower to 4.2%, down from 4.3%.
The data showed that whilst the US labour market is clearly losing steam, it’s not falling off a cliff as the market fared following July’s date.
The market is weighing up whether the Federal Reserve will cut interest rates by 50 basis points or 25 basis points in the September meeting. This remains a finely balanced decision.
The market is pricing in a 40% probability over 50 basis point rate cut, up from 30% last week.
