Insight

Is the Singapore Dollar the Trade War’s Latest Casualty?

The Singapore Dollar (SGD) has followed the similar fate of many counterparts to the USD that have succumbed to the adversity faced in the midst of a trade war between the world’s two largest economies.

Indeed, China’s situation is not ideal for any countries in the Pacific Rim, even the island-city nation whose high-end technology and banking sectors are also being negatively affected. As a result, SGD fell to its weakest point against the American buck in over 2 years. As commodity prices go down with turbulence in trading dynamics, expect the Singaporean economy to feel some pain as adjustments take place to cope with a wider case of protectionism worldwide, even in Europe. A place that highly depends on free trade, the SGD will gauge the country’s resilience and we strongly believe it could appreciate dramatically if a solution is negotiated in the tariff impasse. Additionally, we shall monitor diplomatic developments between South Korea and Japan, nations that recently entered into a trade conflict of their own exacerbating uncertainty in Asian markets further affecting SGD value.

See also our insight on the wider global take:

Half-Year Impressions: BRL, INR & CNY

Juan Perez Senior FX Trader and Strategist Tempus

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