- Singapore dollar (SGD) falls for a second day
- MAS could cut rates at the next meeting
- US Dollar (USD) rises after strong data
- Trump could apply aggressive tariffs
The US Dollar Singapore dollar (USD/SGD) exchange rate is rising for a second straight day. The pair rose 0.06% in the previous session, settling on Tuesday at 1.3640. At 20:00 UTC, USD/SGD trades +0.27% at 1.3679 and is in a range of 1.3639 and 1.3711.
The Singapore dollar, along with its Asian emerging market peers, fell on Wednesday as the US dollar strengthened following data showing that the Fed need not rush to lower interest rates and amid concerns over Trump’s trade tariffs.
In contrast, the Singapore central bank may lower interest rates at this month’s policy meeting, given that the country’s core inflation has likely cooled slightly more than expected in December.
This comes after the core inflation rate in Singapore came in at 1.9% in November of 2024 compared to the same a year earlier, down from 2.1% in October and below the 2% target level.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 109.03 at the time of writing, up 0.45%, marking its third day of gains.
The U.S. dollar rose for a second straight session on Wednesday, tracking bond yields higher. The US 10-year treasury yield hit an 8 1/2-month high on reports that President-elect Donald Trump was contemplating using emergency measures to allow for a new tariff program.
The market anticipates that Trump’s policies of deregulation and lower taxes will boost economic growth. Tariff actions could also accelerate inflation.
These concerns come as recent data has highlighted the resilience of the US economy. Today, jobless claims fell to the lowest level in 11 months of 201k, below estimates of 218k. However, ADP payrolls were slightly weaker than expected at 122k down from 146 K in the previous month.
The data comes ahead of Friday’s key monthly nonfarm payroll report.
The market is pricing in just 39 basis points of cuts from the Federal Reserve this year, which equates to just 125 basis point rate cuts.
