The Singapore dollar’s surge to a nearly nine-month high may have caught analysts by surprise after weak economic data, but the rally is likely to be cut short soon, analysts said.
“The Singapore dollar is overvalued,” said Callum Henderson, global head of FX research at Standard Chartered, with the gains driven by external factors, not domestic fundamentals.
The currency rallied 0.5 percent over the past week, with the greenback fetching just 1.2359 Singapore dollars Thursday, a level not seen since the end of October last year. It is up nearly 2 percent against the dollar year-to-date.
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