Singapore Dollar General Info
According to the Bank for International Settlements, trading in the Singapore dollar contributes to 1.8% of the foreign exchange market’s daily turnover, and as such the currency is Asia’s third most traded (behind the Japanese yen and China’s yuan) and the twelfth most traded in the world.
Singapore’s currency is of special importance to the country’s central bank, the Monetary Authority of Singapore (MAS). Unlike other central banks which tighten or ease monetary policy by adjusting a national interest rate, the MAS achieve the same end via management of Singapore dollar exchange rates – an unconventional method which has served the country well since its introduction in 1981.
Because of its importance to monetary policy, the value of the Singapore dollar is managed carefully under a ‘managed float’ regime and is not truly freely floating. Its value is managed against a basket of currencies from the country’s major trading partners and the trade-weighted Singapore dollar exchange rate is restricted by the central bank to moves within a specified range, the boundaries of which are announced every six months.
The currency’s all-time valuation low against the US dollar occurred in September 1985 when USD/SGD reached 2.31. Its all-time high came in August 2011 when USD/SGD fell to just 1.2.
SGD - Market View
The Singapore dollar did well in Q1 of 2017 (up 3.6% vs. USD) and is chugging along nicely in Q2.
By the end of May, with the SGD/USD exchange rate in the low 0.72s, the Singapore dollar had made back more than 50% of its losses against the US dollar since June 2016 when SGD/USD briefly managed to push above 0.75.
Recent news that has boosted the currency has been Singapore’s Ministry of Trade and Industry (MTI) forecast in May for above-2% economic growth this year. Singapore’s GDP is, however, experiencing great volatility at present. The country’s economy contracted by 1.3% in Q1 but grew by a whopping 12.3% in Q4.
In 2017, the Singapore dollar will be vulnerable to global economic and political developments including potential US protectionism, uncertainty in Europe over UK-EU ‘Brexit’ negotiations and the health of China’s economy.
SGD/USD - 21:00 SGT
1 Day 1 Week: Singapore Dollar was friday up against the United States Dollar with the SGD/USD at 0.7210, a rise of 0.24% but remains down for the last 7 days with a drop of -0.86%.
3 Month Trend: SGD/USD is trading higher in the 3-month range [Hi:0.7272, Lo:0.7086] and for the quarter is up 0.52%.