#SINGAPORE DOLLARS EXCHANGE RATES DRIVER#

What has affected the USD/SGD rate in 2022? The US dollar is considered to be a safe haven asset, along with US Treasuries and precious metals, which investors buy to protect their wealth during periods of economic and geopolitical uncertainty. Currency traders closely monitor major economic indicators including GDP, manufacturing activity, unemployment rates, and international trade data to gauge the performance of the US economy as well as the global outlook. The dollar reflects the economic performance of the world’s largest economy, and by extension, is affected by sentiment on the health of the global economy. The US dollar is the world’s reserve currency and as such is the most actively traded on the forex market.

#SINGAPORE DOLLARS EXCHANGE RATES DRIVER#

And as exports account for a large proportion of its GDP, demand for products such as chemicals, refined petroleum and electronics is an important driver for the currency. The city state is also a regional financial hub for corporate banking and wealth management.Īs Singapore imports natural resources and raw materials for refining, the value of its dollar is strongly influenced by commodities prices. Singapore’s economy is centred on intermediary trade, buying raw materials that it refines for export, and its port is the second busiest in the world measured by cargo tonnage. The S$NEER values the Singapore dollar against a basket of currencies from Singapore’s main trading partners and competitors to manage inflation from imports and maintain the competitiveness of its exports. Since 1985, the MAS has maintained the Singapore dollar in a floating band known as the Singapore Dollar Nominal Effective Exchange Rate (S$NEER). It releases statements about the nation’s monetary policy twice a year.

The MAS manages the value of the Singapore dollar by intervening in the forex market and adjusting the banking system’s liquidity. The Singapore dollar is the official currency of Singapore and it is also accepted in the state of Brunei as a result of a Currency Interchangeability Agreement. The USD/SGD currency pair in foreign exchange ( forex) trading shows how many Singapore dollars – the quote currency – are needed to buy one US dollar – the base currency. In this article, we look at what drives the value of the two currencies and the outlook for the USD/SGD exchange rate based on analysts’ forecasts. The move came even as Singapore’s second quarter gross domestic product ( GDP), a key economic metric, came in below expectations at 4.8% compared with a consensus estimate of 5.4%, although first-quarter GDP was revised up from 3.7% to 4%.Ĭan the Singapore dollar continue to gain value against the US currency even with the persistent strength in the greenback against a basket of currencies? Or will the USD continue to rebound against the SGD? The MAS raised the midpoint of the SGD’s trading band against other currencies in response to rising inflation.

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Singapore dollars exchange rates