Singdollar rises to 4-month high against Aussie dollar

Expectations of Aussie rate cut, Sino-US trade tensions weigh on sliding currency

The Singapore dollar hit a four-month high against the sliding Aussie dollar yesterday.

One Singdollar could buy A$1.051 compared with A$1.001 on the same day last year, a fall of 5 per cent. The last time one Singdollar could buy A$1.051 was on Jan 3 this year.

The decline is making holidays and university fees Down Under that much cheaper for Singaporeans, but Australians coming here might feel the pinch.

Analysts said expectations of an Australian cut in interest rates and ongoing trade tensions between the United States and China have cast a shadow over the Aussie dollar.

CIMB Private Banking economist Song Seng Wun said the potential rate cut deters investors from holding assets in Aussie dollars. That in turn has reduced demand for the currency.

Mr Song said: "The (New Zealand) central bank lowered its benchmark policy interest rate this week, and the expectation is that Australia would be next."

Australia is also a victim of the Sino-US trade tensions, experts pointed out.

Maybank foreign exchange research head Saktiandi Supaat said the Aussie dollar was dragged lower yesterday morning when US President Donald Trump mentioned that "China broke the deal" at a campaign rally in Florida.

Mr Song added that the upcoming Australian federal election matters less to the continent's economy than the US-China trade row.

"The biggest worry for the Australian economy... is the escalation in trade tensions between the United States and China."

Australia's economy, which relies heavily on the export of its resources - from minerals such as iron ore and coal to dairy products - is vulnerable to Chinese growth prospects, Mr Song added.

FEAR OF TRADE WAR

There could still be expectations of a rate cut that weigh on the Aussie dollar, but in the near term, it is the fear of trade war that poses the biggest drag.

MR SAKTIANDI SUPAAT, Maybank foreign exchange research head, on Australia being a victim of the Sino-US trade tensions.

He also noted that parents who have children studying in Australia will benefit from the Aussie dollar's decline: "It is a good time to send money over."

Mr Saktiandi added: "There could still be expectations of a rate cut that weigh on the Aussie dollar, but in the near term, it is the fear of trade war that poses the biggest drag."

Mr Barakath Ali, first vice-president of the Money Changers Association (Singapore), said sales of Aussie dollars have not been affected yet as the main spur to buying is "normally due to the holiday season", which has not started yet.

And some might be expecting the Aussie dollar to drop further, so they are holding off, he added.

The Singdollar has been steady against major currencies, with little change against the US dollar, euro or yuan.


Australia's new $50 banknote. A central bank spokesman said the error will be corrected at the next print run.
Australia's new $50 banknote. A central bank spokesman said the error will be corrected at the next print run. PHOTO: AGENCE FRANCE-PRESSE

Eagle-eyed Aussie spots typo on new $50 note

SYDNEY • Central bank bosses in Australia admitted to an embarrassing error yesterday, revealing that their new $50 note had a typo.

The note, worth around S$48, came into circulation last October. It has multiple security features - including microprint of a speech by Australia's first female parliamentarian Edith Cowan.

It took seven months for the public to notice that "responsibility" was misspelt in the text of her 1921 maiden speech.

"I stand here today in the unique position of being the first woman in an Australian parliament. It is a great responsibilty," the text reads, missing an "i".

The script is barely legible to the naked eye and the Reserve Bank of Australia may have got away with it, were it not for one eagle-eyed radio listener.

But there are no plans to pull the notes from circulation.

"The Reserve Bank of Australia is aware of it and the spelling will be corrected at the next print run," said a bank spokesman.

Ms Edith Cowan played a crucial role in winning the vote for women in Western Australia and at the age of 60 entered Parliament. There, she was instrumental in opening the legal and other professions to women.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on May 10, 2019, with the headline 'Singdollar rises to 4-month high against Aussie dollar'. Print Edition | Subscribe