US dollar rises to highest level against Sing$ this year

With nomination of Fed chair, volatility in exchange rate seen to extend into next year

- Kang Wan

The US dollar yesterday strengthened to its highest level against the Singapore dollar this year after Mr. Jerome Powell was nominated to serve a second term as chairman of the US Federal Reserve the day before.

The Singdollar/US dollar exchange rate hit a high of 1.3654 yesterday. In January, the exchange rate was 1.3175. Analysts here expect the exchange rate volatility to continue for the rest of the year and into next year, with the exchange rate fluctuating between 1.34 and 1.39.

Mr Peter Chia, senior FX strategist at UOB, said the US dollar is appreciating due to markets pricing in expectations that the Fed, the United States central bank, will taper its bond-buying programme at a faster pace and raise interest rates sooner rather than later.