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Singapore dollar rises as US Fed keeps rates unchanged
THE Singapore dollar rose on Thursday in line with other currencies after the US Federal Reserve kept interest rates unchanged, but the local unit's rally was weighed down by what the Monetary Authority of Singapore (MAS) might do next month.
The Singapore dollar rose to S$1.3528 at 3.36 pm from S$1.36 on Wednesday.
"The Singapore dollar is not strengthening so much on concerns what the MAS can do," said Leslie Tang, senior foreign exchange analyst at Maybank FX Research.
With the US Fed keeping a hold on a rate hike and the next meeting in November - more than a month away - the odds of an easing by MAS in its October monetary policy meeting has increased, he said.
A strong Singapore dollar does not help the local economy which is struggling with rising unemployment, Mr Tang said.
A recent MAS poll of 22 economists and analysts expect the local economy to grow 1.8 per cent for all of next year, markedly slower than their median 2.1 per cent forecast made in June. They expect full-year 2016 growth unchanged at 1.8 per cent.
Unemployment rate in Singapore rose to 2.1 per cent in the second quarter of 2016, compared with 1.9 per cent in the first quarter, the Ministry of Manpower said last week.