In this week’s issue:
- Fewer fresh university grads found jobs in 2025
- About 100,000 workers will be trained under Singapore’s new AI programme
- How a weaker US dollar affects your investments
The US dollar has been on a bumpy ride in recent months.
The US dollar index, a popular gauge of the dollar’s strength in global markets, fell to a four-year low in late January before surging again after the US and Israel struck targets in Iran.
Despite the modest rebound, the US dollar remains below levels seen a year ago. As of March 6, one US dollar is worth about S$1.28, down from around S$1.33 a year ago.
In short, political and economic uncertainty surrounding the US has weighed on the dollar, whether that’s a military intervention in Venezuela, renewed talk of territorial expansion into Greenland or a slowdown in the US economy.
That might seem like a distant issue for Singaporeans. But if you own US stocks or exchange-traded funds, the decline might have already shown up in your investments.
So is a weaker greenback cause for worry? We spoke to experts to find out what the currency’s decline means for your assets.
🤕 Why has the US dollar weakened?
The US dollar’s slump is largely being driven by two forces: economic developments in the US and rising geopolitical uncertainty.
As growth and employment in the US slowed towards the end of 2025, the Federal Reserve – the US’s central bank – started cutting interest rates to boost the cooling economy, with more cuts expected to come.
Lower interest rates make assets denominated in US dollars less attractive since they offer lower returns than assets in countries where rates are higher. As a result, investors convert their money into higher-yielding currencies, reducing demand for the US dollar.
Meanwhile, currencies of other economies – including Singapore – have strengthened as global capital shifts towards stable, well-governed markets with lower volatility and strong fundamentals and yield, says Geoff Howie, a market strategist at the Singapore Exchange.
Geopolitical tensions have added another layer of concern, says Glenn Tan, a portfolio manager at Providend.
Trump’s erratic tariff announcements, the US’s military action in Venezuela earlier this year and threats to impose tariffs on European countries that oppose his bid to acquire Greenland have raised more questions about the institutional integrity of the US.
There are, of course, many other factors influencing the US dollar – far too many to neatly list in a single newsletter.
Questions over the independence of the US Federal Reserve have rattled investors, with some worrying that interest rates could be influenced by political pressure rather than economic conditions. Markets have also been watching speculation that US and Japanese officials could step in to support the yen, which would weigh on the US dollar. Central banks around the world have also been holding less US dollars in their foreign exchange reserves in favour of gold and other currencies.
All of which is to say: currency movements are complicated. But they have real implications for your investments.
💸 Are my US-listed assets worth less now?
For Singaporean investors investing in US-listed assets that are priced and traded in US dollars, currency movements can affect the returns you ultimately receive.
Say you invested US$10,000 in a US-listed fund. Let’s assume that the fund’s value remains unchanged.
If the US dollar weakens by 10 per cent against the Singapore dollar, you stand to lose 10 per cent of your returns when you convert it into Singapore dollars.
But that doesn’t automatically mean your investments will lose money.
“Your final investment return is dependent on how the asset performed in US dollar terms as well, “ says Tan.
For instance, if the US dollar weakens by 3 per cent but the stock price of your US asset increases by 5 per cent, you would still come out ahead overall, Tan explains.
Howie echoes that point: the most important drivers of a stock’s performance still boil down to the company’s earnings, how expensive the stock is, and where the company earns its revenue from. The exchange rate is one factor among several.
🤑 Could a weaker US dollar be a good thing?
A weaker US dollar isn’t necessarily bad news.
If you’re a Singaporean investor looking to invest in US dollar assets, you could benefit from the US dollar’s dip.
Should the US dollar rebound against the Singapore dollar later, investors could enjoy both the return on the US dollar asset and the additional boost from the currency’s appreciation, says Tan.
Plus, a weaker US dollar could be a win for major US-listed companies which earn a huge chunk of their revenue overseas, especially as other foreign currencies rise against the US dollar. According to financial services company Apollo, as much as 41 per cent of revenues from S&P 500 companies come from overseas sources.
When those foreign earnings are converted into a weaker US dollar, revenue could look larger in US dollar terms, offsetting declines caused by a weaker dollar, explains Tan.
👋 Is it time to start diversifying away from the US?
Some investors may take a weaker greenback as a sign to step back from the US market. However, Tan emphasises the importance of investing for the long-term, especially given the unpredictability of currency movements.
“While currency movements do have an impact on portfolio returns, such movements are cyclical in nature,” says Tan. “Thus, investors should generally avoid using currency movements as signals to enter or exit specific markets.”
It all comes down to the golden rule of investing: maintaining a globally diversified portfolio. In the current market environment, this means getting exposure to a variety of currencies which will rise when the US dollar falters.
✨ Would Singapore stocks be more attractive to hold?
With a stronger Singapore dollar, some investors may start looking closer to home.
Local stocks have the advantage of being priced in Singapore dollars, meaning returns aren’t directly affected by currency fluctuations.
Still, a softer US dollar could also reflect broader concerns about the US’s growth, which could weigh on global market sentiment, Howie says.
Tan also notes that despite the recent strong performance of Singapore stocks and the Singapore dollar, returns for global investors remain competitive.
Over the past decade, investing in the US S&P 500 would have returned 14.2 per cent per annum, compared to a 10.86 per cent return in an investment in a Singapore Straits Times Index (STI) exchange-traded fund (ETF) over the same period.
It’s also worth noting the structural differences between the two markets.
“The STI is also overwhelmingly allocated to financial and real estate sectors, with those two accounting for more than 70 per cent of the index,” says Tan. “While developments over the past few years have been positive for these industries, there is no guarantee that the same conditions will continue to persist in the near term.”
📝 So what’s the plan?
Exchange rates are notoriously difficult to predict because so many factors can affect a currency.
Tan offers a simple rule of thumb: In uncertain markets, a diversified portfolio is more likely to deliver the long-term returns needed to reach your financial goals.
Instead of trying to guess the US dollar’s next move, it may be wiser to review whether your portfolio is diversified enough to weather currency shifts and still support your long-term investment goals.
TL;DR
- The US dollar has weakened amid rising geopolitical and economic uncertainty
- A weaker US dollar could dilute Singapore dollar returns on US-listed assets
- Singaporean investors may benefit if the US dollar rebounds over time
- Experts favour sticking to long-term, globally diversified portfolios to mitigate currency impacts
💰 Money
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Air tickets on Asia to Europe routes soared following the closure of key Middle Eastern hubs due to the US-Israel war against Iran. Airlines operating non-stop services through alternative routes may see short-term gains.
⚖ Economy
- Singaporeans may have to brace for higher prices following the closure of the Strait of Hormuz, a critical shipping route for where about 20 per cent of the world's daily oil consumption passes through.
- Singapore says it remains unclear if US tariffs on the country will rise from 10 per cent to 15 per cent, despite Trump's announcement of a tariff hike on Feb 21. Still, the Singapore government says tariff developments on Singapore's economy "is not expected to be significant".
📈 Investing
- The ongoing US-Israel war on Iran has sent capital shifting away from aviation and logistics towards defence, energy, and gold-linked assets. Here’s a deeper look into which sectors stand to gain during the conflict.
- US software companies are ramping up share buybacks amid investors’ worries that artificial intelligence could disrupt the sector – though investors remain sceptical.
💼 Career
- Singapore will roll out the new National AI Impact Programme, which aims to equip about 100,000 workers in fields such as accountancy and law with practical AI skills starting in the first half of 2026.
- Fewer fresh university graduates found jobs in 2025, with the proportion of graduates in full-time jobs down from 79.4 per cent to 74.4 per cent within six months of their final exams. Meanwhile, the median salary stayed flat.
Poll of the week
Are you worried about a weaker US dollar?
Last week’s poll
Are you living an infinite working day?
Yes – 66.7%
No – 33.3%
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