Singapore dollar weakens against US dollar, with the greenback gaining on most currencies as election wraps up
The greenback gains on many global currencies in early trading on Wednesday
THE Singapore dollar weakened against the US dollar as the greenback gained on many global currencies in early trading on Wednesday (Nov 6), with the first US polls starting to close.
The US dollar rose around 1.5 per cent against the Singapore dollar, trading at 1.333 at around 2:50 pm. It also gained on the euro, Australian dollar and yen, which all slipped more than 1 per cent. The yen and the euro were among the biggest losers, with the dollar gaining 1.7 per cent against the yen to 154.19 and strengthening around 2 per cent against the euro.
The US dollar index overall jumped nearly 1.7 per cent to 105.22, further building on gains from the morning.
The first polls closed on Tuesday evening US hours in six states, with Reuters reporting that early results from the US presidential election suggested the race remained too close to call.
UOB said in a research note on Wednesday that the the US dollar could rise further to 1.3270 against the Singapore dollar.
“While we expect USD/SGD to rise further towards 1.327... the pace of the sharp rally over the past few weeks may not be sustainable. The advance in USD/SGD could slow or pause upon reaching these levels,” it said in a separate, recent note.
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The fortunes of the Australian dollar will partially depend on whether there’s a Trump victory, said DBS strategists in a Tuesday note.
“To push higher, AUD needs the USD to keep weakening on waning expectations of a Trump victory in today’s US elections, and for the Reserve Bank of Australia to delay interest rate cuts to 2025 amid more positive developments with China,” they wrote.
Meanwhile, other factors will guide the trajectory of the US dollar, said DBS, which described it as the “most over-valued”. The bank’s strategists said its valuation has been driven by expectations of fewer Federal Reserve rate cuts amid stronger consumption in the country, and higher political uncertainty as well as trade tensions.
“Nevertheless, the USD’s valuation could soften if job creation slows, as evidenced by non-farm payrolls for October which sharply missed expectations,” said DBS strategists.
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