- Singapore dollar (SGD) rises after losses yesterday
- EM currencies fell after Trump’s victory
- US Dollar (USD) falls from a 4-month high
- The Fed is expected to cut rates by 25 basis points
The US Dollar Singapore dollar (USD/SGD) exchange rate is falling, giving back some of yesterday’s strong gains. The pair rose 1.48% lower in the previous session, settling on Wednesday at 1.3329. At 16:00 UTC, USD/SGD trades -1% at 1.3194 and is in a range of 1.3185 and 1.3347.
The Singapore dollar rebounded on Thursday after tumbling sharply in the previous session. It dropped to its lowest level in three months and marked its worst session since November 2011.
The Singapore dollar, along with other Asian currencies and the Mexican peso, all hit hard after Trump was declared the winner of the US presidential election.
Emerging market currencies, particularly currencies across Asia, were hit yesterday by the fears of tariffs, given that most Asian economies rely on trade growth. However, those fears calmed on Tuesday, helping the currencies recover some of those losses.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 104.00 at the time of writing, down 0.87%, giving back some of yesterday’s gains.
The USD is falling as traders close out Trump long positions ahead of the Federal Reserve interest rate decision later tonight.
The Fed is expected to lower interest rates by 25 basis points to 4.5 to 4.75%. This move comes just days after Donald Trump was elected the 47th president of the United States.
The Fed is expected to continue with its rate-cutting cycle despite Trump’s win, and Federal Reserve chair Jerome Powell’s remarks will be watched closely for clues about further rate cuts.
The market is pricing in a 70% probability that the Fed will cut rates again in December, which could limit gains in the greenback.
Should the Republicans get a clean sweep, it will be easier for Trump to implement a full range of policies, including deregulation, lowering corporation taxes, and increasing trade tariffs.