FX.co ★ Singapore Dollar Climbs to Over 10-Year High

The Singapore dollar appreciated to approximately 1.27 against the US dollar at the beginning of July, reaching its highest point since October 2014. This improvement was underpinned by consistent domestic policy adjustments, heightened risk appetite, and a general weakening of the US dollar. The Monetary Authority of Singapore has recently opted for a moderate approach by slightly adjusting the slope of the SGD’s nominal effective exchange rate policy band to address the slowing economic growth. This prudent strategy has succeeded in preventing the currency from overheating while demonstrating confidence in Singapore's economic stability. The relative stability of the SGD, particularly when compared to the increased volatility experienced by many emerging-market currencies, has bolstered investor confidence significantly. Additionally, the currency benefited from improved global risk sentiment, even amidst ongoing trade uncertainties, as the benchmark Straits Times Index neared new record highs. Concurrently, the US dollar experienced a decline, attributed to growing expectations for more substantial rate cuts by the Federal Reserve.