Sing$ closes in on 10-year high as tariff turmoil saps US dollar dominance

Question is whether strength is sustainable amid trade uncertainty, slowing growth

- Ovais Subhani

The Singapore dollar has emerged as one of the winners from the chaos of President Donald Trump's trade policy, which has triggered a global sell-off in assets denominated in the once mighty US dollar.

The local currency was trading at 1.2964 per US dollar at 9.30am on May 6, up 4.6 per cent to date in 2025 and closing in on the 10-year high of 1.2807 reached in September 2024.

The gains are almost entirely a consequence of the US dollar's precipitous decline since Mr Trump unveiled his so-called global reciprocal tariff plan on April 2.

The US Dollar Index – a measure of the greenback's value relative to a basket of currencies of America's most significant trading partners – has fallen by about 5 per cent since April 2.

But before you rush to book your flights thinking the strong Singapore dollar will make your overseas sojourn cheaper, do pay some consideration to whether this strength is sustainable in the coming months.

The Singapore dollar's strength is surprising given that the export-driven economy is likely to suffer as uncertainty over trade upends global supply chains and reduces business investment and consumer spending.

It is also undesirable from the perspective of policymakers, as the mix of a stronger currency and rising protectionism could make exporting goods even more difficult.