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 Singapore dollar declined nearly 0.9 per cent against the greenback, while the euro was down 0.76 per cent and the Australian dollar slipped around 0.23 per cent. The US dollar index overall rose nearly 1 per cent to 104.44, building on gains from the morning.
The US dollar also strengthened against the yen, which was down 0.6 per cent.
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 Tuesday that the Singapore dollar could edge lower to 1.312 against the US dollar. Currently it stands at around 1.3215.
“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.
