Sing dollar marks 3-year high vs the Greenback

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.

 Mr Stephen Innes, head of Asia-Pacific trading at Oanda, said: “While we already knew the administration previously favoured a weaker dollar, US Treasury Secretary Mnuchin’s comments caught the dollar prone and defence-less, opening floodgates to a massive wave of dollar-selling, and accelerated the expected US dollar downtrend.”
The Straits Times

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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes