SINGAPORE: Singapore’s dollar advanced to its strongest in almost a decade as traders weighed the difference between the local monetary authority’s relatively hawkish policy outlook compared with that of the Federal Reserve (Fed).

The local dollar hit levels last seen in 2014 against the greenback late last Friday, and fluctuated around the 1.30 per dollar in early trading yesterday. The currency has gained about 1.5% this year, to be the second-best performer in Asia behind the ringgit.The Monetary Authority of Singapore, which uses the exchange rate as its main monetary policy tool, maintained an appreciating bias for the currency at its July meeting to rein in inflation.

Singapore upgraded this year’s growth forecast last month to a range of between 2% and 3%, from an earlier band of 1% to 3%, citing a resilient external demand outlook, further underpinning the local dollar.

On the other hand the greenback slumped after Fed chairman Jerome Powell all but confirmed that interest-rate cuts are coming to the US next month. — Bloomberg