Singdollar at one-year high against USD
Reuters file photo
SINGAPORE/TORONTO — The Singapore dollar was at a one-year high against the US dollar on Thursday morning (June 23) as a reduced likelihood of the UK voting to leave the European Union returned focus to Federal Reserve policy makers’ concern about economic headwinds and a gradual pace for interest-rate increases.
On Wednesday, the US dollar fell against all its major peers. It weakened to a seven-week low during the day after Federal Reserve chairwoman Janet Yellen reiterated a cautious and uncertain view of the US economy during a congressional testimony.
As trading closed on Wednesday, the Singdollar was trading at US$1 to S$1.3384, showed Bloomberg data. As of 8.35am Thursday (Singapore time), US$1 was at S$1.3366 — a level not seen since June 22 last year when US$1 was S$1.3356. The lowest the USD has ever been against the Singdollar in the past five years was on Aug 26, 2011 when US$1 was at S$1.2030. The Singdollar has not gone below the US$1 to S$1.30 mark since November 2014. The highest the USD has been against the SGD over the past five years was on Jan 8 this year when US$1 was S$1.4428.
The US dollar weakened against the euro and pound as traders took cues from betting odds that point to the UK voting to stay in the EU.
“There was a tremendous selling of the euro and sterling, and now we’re seeing those being bought back,” said Mr Douglas Borthwick, the New York-based head of currencies at Chapdelaine & Co to Bloomberg. If the “Remain” campaign wins, the sterling and the euro will extend gains against the dollar, he said.
The US currency has fallen 2.6 per cent in June on expectations that the Federal Reserve won’t be able to raise interest rates, in contrast with its peers in Europe and Japan, which are carrying out monetary stimulus.
The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, declined 0.4 per cent as of 5am Thursday (Singapore time) in New York, its weakest level since May 4. The US dollar weakened 0.5 per cent to US$1.1296 per euro and fell 0.3 per cent to 104.41 yen. BLOOMBERG with additional reporting by TODAY.
