More American goods may be able to be purchased in just one Singapore dollar, but it has lesser value compared to other major currencies in other countries.
Recently, the New Zealand and Australian currencies hit the highest levels against the Singapore dollar for over a year. Ever since the start of the year, the two currencies are capping a surge of around 30% each. In the recent months, major currencies like the pound sterling, the euro, and the Japanese yen have also been gradually strengthening against the Singapore dollar.
Yesterday, the Aussie traded to the Singapore dollar at $1.22, up from its lows of 91.58 cents in October last year and 95 cents in January.
According to Bloomberg, the New Zealand dollar, the best-performing currency all throughout the world for over the last six months, had a dramatic jump from 75.61 cents in February, hitting 98.83 cents to the Singapore dollar.
Based on the business finance analysts, as the inventors seek assets that can yield higher income and turn their backs on the ‘safe haven’ US dollar, the two currencies benefit from the growing appetite around the world.
The analysts have also explained that as Australia has miraculously evaded the technical recession, the investors are drawn to its relatively high interest rates as well as the health of its economy.
Emmanuel Ng, the forex strategist at OCBC Bank, said that as the global economy has begun to stabilise, a dichotomy has surfaced between the ‘old world’ currencies and ‘new world’ ones.
Compared to the old-world currencies like the euro and the pound sterling, the growth-linked currencies with high yields, like the New Zealand and the Aussie, are rather getting more profit from the recovery story. Ng has also stressed that this may reflect ongoing worries regarding the banking problems as well as the fundamental growth in the countries around Europe.
Yesterday, the euro increased to 2.07 against the Singapore dollar, a growth of only around 7% from its lows of 1.93 in February. Also, yesterday, the pound, which was 2.36 to the Singapore dollar, increased by 15% since January when it bottomed at 2.05. For the yen, its value decreased by around 10% against the Singapore dollar since January, but over the last month, it has been slightly rising. Yesterday, the Singapore dollar changed hands at 64.61 yen.