Singapore Dollar at Risk, USD/SGD Soars as MAS Brings Up Coronavirus

The Singapore Dollar is under immense pressure as it reaches historic lows. This currency is almost as volatile as the Mexican Peso. As the case may be, the currency could drop below US$1. Perhaps one of the reasons is that there is fear of the world economy in a major collapse.

As the Japanese Yen and the British Pound collapse in value, the Singapore Dollar is bound to follow suit. The downward pressure on the Yen will certainly cause an increase in the Dollar’s value.

If a Japanese Yen or a British Pound falls, the Koi (red paper) would probably have to follow suit. Koi are a mainstay of Asian currencies and are very good-sized fish that float in sea water. The Koi is traded between two Asian currencies; the Philippine Peso and the Singapore Dollar.

But it is not the case that the BSP and RBI might simply let the BSP lower the British Pound to bring down the Korean Won. In fact, the possibility of a weaker Yen and rising US Dollar makes it clear that a higher local currency is a must for Singapore’s foreign exchange (forex) operation.

Given that the Fed has started to raise interest rates, the big question here is whether it will maintain the US Dollar’s strength. Will it hike too early?

China has been the strongman when it comes to influencing the Australian Dollar and its long-term trends. But as the Chinese economy goes into a downturn, so does the Australian Dollar.

Alaska residents are now beginning to realize that they cannot get their oil. The price of crude oil is at a four-year low. The Alaska Depreciation Ratio is at a record low, so the tax dollars have gotten used up too fast.

The FAP Fee Increases on banks and other financial institutions are going to put them into negative equity or near negative equity. How much worse can things get in the coming days?

The Indian and Chinese economies are also suffering from an over-supply of hard currency and are having trouble keeping up with the rising international oil prices. But what really is a problem for the Australian Dollar and its growing weakness in its foreign exchange counterparts? Global oil and commodities prices have been incredibly weak.

It would not make sense for Australia and other Asian countries to prop up international oil prices while their economies are shaky and there is no sign of a stable external financial stability. The commodities have gone to almost all-time lows, which are forcing some commodity producers to default.

And it is not just the Asian countries, but the Western world as well that is experiencing massive over-supply of commodities. If global oil prices stay low, then it might only be a matter of time before the Asian currencies depreciate along with the Malaysian Ringgit and the South African Rand.

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