USD/SGD: A high-performance exotic based on strong economies

USD/SGD is an exotic forex pair with the US dollar as the base currency and the Singapore dollar as the quote currency. As such, it belongs to the largest group of FX pairs, exotics, which carry unique benefits and risks, fitting traders with a peculiar risk profile. The pair represents the exchange rate of the two currencies, with one USD currently being valued at 1.35 SGD.

Exotic pairs are made up of one of the more prominent world currencies and a currency from an emerging economy. This means they are far less commonly traded than forex majors or minors, offering lower liquidity and often higher spreads.

In other words, this makes exotics less suitable for certain strategies like scalping and, to an extent, day trading. However, another significant quality of exotic pairs is that they offer higher volatility. They are more likely to make sizable moves. As such, position traders who are confident in their knowledge of global economic affairs may be able to capitalise on that movement better than they would with pairs that are more incremental.

This article is devoted to explaining the specifics of the USD/SGD pair as they concern forex traders. That includes general currency info, drivers, peak trading times, and more.

USD currency info

The US dollar is the most prominent currency in forex trading. It comes from the world’s most developed economy, it’s the most traded, and the most kept in global reserves. FX major pairs are, in fact, defined by having the US dollar as one of their components.

In the case of the USD/SGD pair, this somewhat alleviates the pressure of being an exotic. Since the USD trades so well, and the SGD (as we’ll see soon) comes from a developing, but relatively strong economy, in terms of exotic pairs, USD/SGD behaves less erratically.

The USD was introduced in 1792, 233 years ago. It first traced a bimetallic standard, then gold standard, and finally became entirely independent in 1971. Its symbol is $, but other abbreviations include U$ and US$, to differentiate it from other dollar-denominated currencies. However, these are rarely used, due to the US dollar being considered the ‘default’ for the $ symbol.

The central bank controlling the US dollar is the Federal Reserve (Fed), it’s printed by the Bureau of Engraving and Printing, and minted by United States Mint.

SGD currency info

The Singapore dollar is the Republic of Singapore’s official currency. It’s also customary tender in Brunei as per the Currency Interchangeability Agreement. Likewise, the Brunei dollar works as customary tender in Singapore.

As noted earlier, the Singapore dollar ranks fairly highly in terms of exotic currencies. It’s the world’s thirteenth most traded currency. The Republic of Singapore has a thriving economy, with low taxes, high GDP, and a remarkably low corruption rate. Famously, one of TikTok’s headquarters is in Singapore.

Since it’s a dollar-denominated currency, SGD’s symbol is also $. For easier differentiation, S$ is also commonly seen. It was introduced in 1967, it’s under the jurisdiction of the Monetary Authority of Singapore, and minted by Singapore Mint.

USD/SGD currency pair – Crucial reports for FX traders

It’s well known that a lot of price movement in forex trading happens when reports are afoot. As such, it’s crucial for traders to follow the releases from economic authorities in the countries where the currencies are used.

In the case of exotics, it’s also important to note that the more significant of the two currencies tends to engulf the smaller one. That’s because they are much more commonly traded, so they often set the tempo.

Lastly, before moving on to some of the primary reports for the US and the Republic of Singapore, it’s also important to know that US states release individual economic data. In the case of some of the economically more significant US states (California, Texas, New York, Florida), this can have some impact on USD valuation. FX traders trying to maximise their effectiveness should consider researching and following these releases as well.

Main FX trader reports for USD

• Gross Domestic Product (GDP) – Bureau of Economic Analysis (BEA), quarterly
• Consumer Price Index (CPI) – Bureau of Labor Statistics (BLS), monthly
• Non-Farm Payrolls (Employment Report) – BLS, monthly​
• Federal Open Market Committee (FOMC) Statement and Federal Funds Rate Decision – Federal Reserve, 8 times per year
• Trade Balance Report – BEA, monthly
• Main FX trader reports for SGD
• Gross Domestic Product (GDP) – Ministry of Trade and Industry (MTI), quarterly
• Consumer Price Index (CPI) – Department of Statistics Singapore (SingStat), monthly
• 실업률 – Ministry of Manpower (MOM), quarterly
• Monetary Policy Statement – Monetary Authority of Singapore (MAS), semi-annually (April and October)
• Non-Oil Domestic Exports (NODX) – Enterprise Singapore, monthly

Main non-report drivers for USD and SGD

The US dollar is considered the world’s top safe haven currency. When global events that cause instability occur, traders tend to flock to USD for safety. Similarly, when people tend to avoid risk and come into flight-to-quality mode, the US dollar is one of the currencies they often run towards. Conversely, in more risk-on moods, traders may choose to sell off USD in search of assets with higher potential yield.

Additionally, since the US political scene is quite influential and globally announced, its political moves and policies have quite a high impact. Currently, US tariffs are the main talking point for world economics, and they have made USD values (as well as US shares and assets from significant trade partners) quite chaotic.

For SGD, it’s important to note that the MAS manages it largely through exchange rate policies rather than inflation. Following these may give traders a better understanding of how the currency will move. Additionally, news from its region and primary trade partners (Southeast Asia and China) may cause SGD to move, although not related to the country directly. Finally, since Singapore is a business hub, news from major companies, such as those in the financial and tech sector, may prove impactful.

Peak trading times for USD/SGD

The highest activity period for the pair spans from 1:00 PM to 5:00 PM GMT, when the London and New York sessions are active. However, since this pair includes the USD, the entire NY session (1:30 PM to 8:00 PM GMT) sees increased activity. Often, activity peaks near the start and end of these timeframes due to built-up tension and predictive trading.

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