The Singapore currency had its worst week in a year on the Forex market, as it lost along with the other Asian currencies to the U.S. dollar, because the investors began to expect that the U.S. interest rate will unchanged rather than lowered next time.
The U. S. dollar rose from its record low bottom against the euro this week and appreciated significantly against eight of the ten most traded Asian currencies (except the Japanese yen). April 24 report on the durable goods showed an unexpected rise in the orders (excluding transportation vehicles) that helped the dollar to go up on Forex.
The uprise of the U.S. dollar and decline of the Singapore dollar (and of the other Asian currencies) is a reflection of the interest rate expectations rescaling. The chances for the 2.25% interest rate in U.S. to be unchanged on the April 30 meeting were zero last week according to the futures on the Chicago Board of Trade. This week the chances went up to 18%.
The Singapore dollar dropped from 1.3729 per U.S. dollar to 1.3633 this week thats 0.7%, the largest weekly decline for this Asian currency in 2008.
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