- Singapore dollar (SGD) falls week to date
- MAS eased monetary policy for the first time in 5 years
- US Dollar (USD) rises after the Fed leaves rates unchanged
- Fed is cautious about the outlook
The US Dollar Singapore dollar (USD/SGD) exchange rate was flat on Wednesday after gains the previous day. The pair rose 0.54% in the previous session, settling on Tuesday at 1.3514. USD/SGD trades -0.01% at 1.3512 on Wednesday and traded in a range of 1.3483 and 1.3535.
The Singapore dollar has fallen across the week after the Monetary Authority of Singapore eased its monetary policy stance for the first time in almost five years last week by reducing the slope of the $NEER policy band. The move comes amid faster-than-expected falling core inflation below the 2% target level on a sustainable basis. The central bank didn’t change the width of the policy band or the level at which it entered.
MAS implements monetary policy by managing the SGD nominal effective exchange rate within a policy band rather than adjusting interest rates.
The strong growth and inflation of last year have faded, and GDP growth is expected to slow in the second half of this year amid slower global and export growth.
The US Dollar was flat against the Singapore Dollar but rose against major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 107.87, up 0.21%, rising for a second straight day.
The USD is rising against its major peers after the Federal Reserve left interest rates unchanged at a range of 4.25% to 4.5% as expected. The decision comes amid signs of a strong labor market and above-target inflation after the Fed cut interest rates by 100 basis points last year.
Strong growth and uncertainty over Trump’s policies meant the central bank offered few clues about when the Fed might start cutting rates this year.
