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Australian Dollar Now Worth Less Than Singapore Dollar

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The Australian dollar has been among the hardest hit of major currencies in recent months. Heavy losses since January have been widely reported in the financial press, with most commentaries focusing on the Aussie’s 8.6 percent decline against the US dollar to levels around 0.745; but the Australian dollar has, of course, suffered elsewhere, and a symbolic marker of its current distress arrived this week when the currency fell below parity with the Singapore dollar for the first time in nearly two years.

AUD/SGD’s fall on Wednesday to just 0.998 (as of 4pm in Sydney) reflects differences in the monetary policy outlooks of the respective central banks.

Whereas the Reserve Bank of Australia continues to see little reason for a near-term increase in interest rates, the Monetary Authority of Singapore is set to tighten monetary policy for the first time since 2012 in response to robust economic growth – 4.3 percent in the fourth quarter – which it will achieve by allowing the Singapore dollar to appreciate; it announced as much in April. The unconventional method of managing policy by managing exchange rates (in simple terms) has been employed with great success in Singapore since 1981.

Although no forecasts for AUD/SGD were available at the time of writing, the Australian dollar will, according to Goldman Sachs, continue to weaken in the broader markets. Speaking to Bloomberg nine days ago, Philip Moffitt, the head of Asia-Pacific fixed income at the illustrious bank, said that it was “hard to be bullish on the Aussie” and went on to predict a decline in AUD/USD to 0.72 by year-end (last seen at 0.7435).



Further Reading


Australia Cuts Interest Rates to Record Low

RBA Australian dollar AUD currency news and forecasts

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Last update: 2 Jul, 2019

GBP’s Bright Start to the Year Is a Distant Memory

The British pound was the worst-performing major currency in the April-June period and remains “impossible to forecast” amid a Tory leadership battle that might force “no deal” or a general election.

Last update: 30 Jun, 2019

Australians Swerve Thai Holidays with Exchange Rates in the Gutter

With AUD-THB at a 10-year low, Australians travelling this year to Thailand’s wildly popular resorts are facing holiday costs 50 percent higher than those paid in 2012. With exchange rates as they are, those in Oz are choosing better-value destinations.

Last update: 23 Jun, 2019


Posted to: News

Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.

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