The greenback sank to a three-year low against the Singdollar yesterday after United States Treasury Secretary Steven Mnuchin said he would welcome a weaker currency.
His comments exacerbated an ongoing slide in the US dollar, which had already fallen 8 per cent against the Singapore currency last year.
The trend is good news for Singapore online shoppers, but for exporters – who usually buy and sell overseas in US dollars – it is a double-edged sword.
A weakening US currency translates into lower earnings for exporters in Singdollar terms, but also means they pay less for imports.
One US dollar could buy about S$1.306 as at 7pm yesterday – down from S$1.312 the previous day and almost 10 per cent lower than S$1.45 at the start of last year. This was its highest since it closed at 1.3050 to the greenback on Dec 17, 2014.
Mr Mnuchin’s comments – seen by markets as a departure from traditional US currency policy – were made at the World Economic Forum in Davos, Switzerland. “Obviously, a weaker dollar is good for us as it relates to trade and opportunities,” he told a press briefing.