Recent alarmist commentary may have stirred up concerns about Singapore’s economy, but in the midst of the emerging market rout, safe-haven seekers’ faith appeared unshaken as they scooped up its currency.
“We have noted its safe-haven status within the Asian region is getting stronger in past years. So when you have a broad risk off, in general the Singapore dollar will outperform,” said Ju Wang, senior foreign-exchange strategist at HSBC.
Earlier this week, global markets largely sold off, but the Singapore dollar strengthened, with the U.S. dollar fetching as little as 1.2666 on Tuesday, compared with around 1.2790 Friday. Against the currency of its neighbor Malaysia, the Singapore dollar has touched its highest level since 1998.
“As long as we continue to see worries over emerging markets for whatever reason, then Singapore may still benefit from the safe-haven tag,” said Song Seng Wun, head of research at CIMB.