Singapore dollar hits highest against US dollar in over 11 years
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The Singdollar gained 0.4 per cent to 1.2678 per US dollar.
photo: Bloomberg
SINGAPORE – The Singapore dollar climbed to its strongest level since October 2014 versus the US currency amid safe-haven flows, and with the nation’s central bank expected to leave its policy settings unchanged this week.
The Singdollar gained 0.4 per cent to 1.2678 per US dollar on Jan 26 as the greenback came under renewed pressure on speculation about potential US involvement in Japanese foreign exchange intervention.
A gauge of the US dollar against a basket of major currencies index slid 0.4 per cent to the lowest level since September 2025, extending last week’s 1.6 per cent decline. This was after a rate check on Jan 23 by the Federal Reserve Bank of New York spurred speculation that the US may assist Japan in efforts to weaken the greenback versus the yen. The Japanese currency surged as much as 1.2 per cent
Traders interpreted the New York Fed’s actions as an indication that the central bank was preparing to assist Japanese officials in intervening directly in the currency market to prop up the yen.
Other Asian currencies also benefited from the weaker US dollar, with the Malaysian ringgit rising to the strongest level since 2018
Helping to boost the local currency, the Monetary Authority of Singapore (MAS) is expected to leave its exchange-rate settings unchanged at its meeting on Jan 29 as core inflation remains steady.
Rather than using interest rates as its main policy tool, MAS focuses on the currency’s nominal effective exchange rate – referred to as S$NEER – which it allows to move within a policy band.
The Singdollar may strengthen “towards the 1.2600 level in the near term” with further downside in the pair contingent on a sustained breakdown in the US dollar, said Mr Lloyd Chan, a foreign exchange strategist at MUFG. “MAS will likely keep its current S$NEER policy setting at the January meeting.”
Investors have been attracted to Singapore in recent years for its dividend-heavy stock market, AAA-rated bonds and relatively predictable government policy. The benchmark Straits Times Index is trading at a record high, and the Singdollar is up about 6 per cent against the US currency over the last 12 months. BLOOMBERG
