The Singapore Dollar weakened sharply against the US Dollar following stronger-than-expected US nonfarm payrolls data, pushing USD/SGD beyond the 1.29 level with further downside projected toward 1.2960. UOB strategists Quek Ser Leang and Lee Sue Ann confirmed the move was triggered by the blowout jobs report, which has reinforced expectations for the Federal Reserve to maintain higher interest rates for longer. Despite the local currency’s losses, Singapore’s nominal effective exchange rate remains well above its policy band mid-point, suggesting the Monetary Authority of Singapore still has room before needing to intervene. The sudden spike reflects broader US Dollar strength as traders recalibrate rate cut expectations. Currency pairs across emerging Asia are facing similar pressure as the greenback extends gains on hawkish Fed sentiment.
FXnCO Insight
Traders should monitor 1.2960 as a critical support level for Singapore Dollar positions, while keeping close watch on MAS communications regarding policy band tolerance as USD strength persists.
Source: FXStreet