Singapore dollar faces pressure from US tariffs, policy shift
SINGAPORE – The Singapore dollar is under renewed pressure as US trade challenges are primed to worsen and as speculation of exchange-rate policy easing rises.
The Singdollar, which is already weakening as the US dollar recovers, faces fresh tariff threats after US President Donald Trump recently warned he
may impose levies on pharmaceuticals and semiconductors, two of Singapore's key exports.
Economists at firms such as Barclays and Asia Decoded expect the Monetary Authority of Singapore (MAS) to move to a more accommodative policy setting in July to support the economy.
'The tariff uncertainty, with higher tariffs on pharmaceuticals likely Aug 1, could add to growth headwinds for Singapore in the second half,' said Moh Siong Sim, a currency strategist at Bank of Singapore. The local dollar may weaken toward $1.30 to the greenback in the near term, especially if rising levies stoke US inflation and delay Federal Reserve interest rate cuts, he said.
The Singdollar was at 1.2846 to the US dollar at 8.10am local time on July 21.
Those concerns are echoed by Priyanka Kishore, principal economist at Asia Decoded. 'Singapore is not only at a disadvantage from the prospect of sectoral tariffs on pharmaceuticals and semiconductors, but may also see an increase in the base rate of 10 per cent on Aug 1,' she said.
Some strategists believe MAS will ease policy when it meets later in July, given inflation appears subdued. Economists predict data due on July 23 will show core inflation rose by just 0.7 per cent in June.
Top stories
Swipe. Select. Stay informed.
Singapore Priority for singles, higher quota for second-timer families to kick in from HDB's July BTO exercise
Singapore Witness stand not arena for humiliation in sex offence cases, judge reminds lawyers
Asia PM Ishiba under siege after trouncing in Upper House polls as 'Japanese First' Sanseito gains
Business Bigger, quieter, greener: High-volume low-speed fans see rising demand in warming Singapore
Singapore New home owners in Singapore find kampung spirit on BTO Telegram groups
Singapore What would it take for S'pore to shed the dirty image of its blue recycling bins?
Business DBS hits record high above $47; CDL up after director Philip Yeo announces resignation
MAS will flatten the slope of its Singapore dollar nominal effective exchange rate, or S$Neer, policy band by 50 basis points to zero in July, rather than waiting, Barclays Bank economists wrote in a note last week.
Unlike many of its global peers, Singapore's central bank manages inflation by adjusting the S$Neer policy band rather than altering interest rates. With the S$Neer trading near the top end of the band, any flattening of the slope will cap the currency's relative strength to its major trading partners.
'With the MAS likely to stay on an easing path and flatten the slope of the S$Neer this month, our bias is for further Singapore dollar weakness,' Asia Decoded's Ms Kishore said.
While Singapore's central bank looks likely to ease policy, bets on Fed rate hikes have been pushed back as policymakers watch for tariff-related inflation, bolstering the US currency.
The Singapore dollar's use as a funding vehicle for carry trades may also weigh on its outlook. Carry trades are a type of foreign exchange trade in which you borrow money in one currency at low interest and invest in another currency that provides a higher rate of return.
Bloomberg Intelligence said in July that three of the four emerging-market exchange factor models it uses in its analysis have gone long the Indonesian rupiah versus short the Singapore dollar. BLOOMBERG
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

Straits Times
an hour ago
- Straits Times
Style News: Takashi Murakami's second Casetify collab, in-store pilates at Lululemon's experiential store
Find out what's new on ST website and app. Casetify drops Takashi Murakami collection The world cannot get enough of Takashi Murakami and, it seems, neither can Casetify. In its second collaboration with the Japanese artist, global tech accessories brand Casetify spotlights two Murakami characters. Innocent Kaikai and mischievous Kiki symbolise the dual forces that drive artistic expression and the collaborative spirit in Murakami's world. They appear on a bevy of products, including phone charms ($141), Snappy trading cardholders ($112), Dangler figurine blind boxes ($70), collectible earbud cases, each in the shape of the two characters ($425), and phone cases ($99). Takashi Murakami x Casetify Bounce Suitcase. PHOTO: CASETIFY The whimsical prints also adorn the Bounce Carry-on Suitcase ($999) and Bounce Trunk Suitcase ($1,289), both from Casetify's Travel collection that was launched in Singapore in May. Leveraging the brand's expertise in impact protection for travel gear, the hard-shell suitcases are customisable and made-to-order. Info: Limited pieces available at Casetify Studio, B3-14 Ion Orchard, 2 Orchard Turn In-store yoga and pilates at Lululemon's refreshed store Lululemon's refreshed Takashimaya store. PHOTO: LULULEMON The Canadian activewear giant has unveiled its refreshed Takashimaya Shopping Centre store – and there are more than just leggings here. Top stories Swipe. Select. Stay informed. Asia Live: Thai-Cambodia border clash Asia At least 2 Thai civilians killed as Thai and Cambodian militaries clash at disputed border Singapore Boy, 15, charged after being caught with vapes 5 times; ordered to stay 2 years in S'pore Boys' Home Business MOM probing work injury claim flagged by late Sumo Salad boss Jane Lee: MOS Dinesh Business New tie-up offers insurance savings for SMEs committed to workers' health and well-being Singapore What's key to a good life? Most Singapore residents choose emotional and mental well-being Singapore Over 2 years' jail for man who worked with wife to cheat her then-boyfriend of $220k Asia South Korea police raid offices of BTS' agency Hybe over share probe Relocated from its former unit on the third floor, the new Lululemon outlet is its first retail-meets-wellness collaboration concept in South-east Asia, bringing product and practice together under one roof. Put your newly purchased Lululemon gear straight to work next door at the integrated local movement studio, Within. Within Studio at Lululemon's Takashimaya store. PHOTO: LULULEMON Founded by brand ambassador Betty Kong, the 1,842 sq ft studio offers a range of yoga and reformer pilates classes – starting at $40 for one drop-in yoga class and $55 for one reformer class. Classes are led by expert instructors, including Ms Kong, who was one of the first ambassadors at the previous Takashimaya store. Lululemon's Takashimaya store. PHOTO: LULULEMON Regular shoppers can still find their favourite lines – including the Align tanks and leggings, and men's ABC Pants – in the store which, at 5,994 sq ft, is Lululemon's largest in Singapore. Info: B1-16 to 22 Takashimaya Shopping Centre, 391 Orchard Road Boss Fragrances' boozy pop-up Boss The Collection's Passionate Chypre. PHOTO: BOSS FRAGRANCES Treat yourself to a scent and a sip at Boss Fragrances' latest pop-up. From July 26 to 31 at Paragon, explore Boss The Collection's 15 perfumes, designed as an olfactory wardrobe and said to each mirror a tailored piece from the German fashion brand. Available in 100ml as both Eau De Parfum ($330) and Eau De Intense ($390), the perfumes have names and scents like Sensual Geranium and Passionate Chypre. Personalise your purchase with free engraving by an on-site artist on selected days. All guests who register for the pop-up online will receive two complimentary vial samples of fragrances matched to their personal style, while stocks last. Boss The Collection's pop-up. PHOTO: BOSS FRAGRANCES If you prefer a blend you can drink, look forward to a live whisky cocktail bar at one end of the pop-up, in collaboration with scent-focused cocktail bar Luni. Mixologists will serve up cocktails inspired by ingredients from selected Boss The Collection fragrances, free for all purchasing visitors on July 27 and 31. The partnership continues after at Luni (01-12, 161 Lavender Street) from Aug 1 to Sept 7, where patrons who buy a drink ($28 each) from the collaborative menu will receive a complimentary vial of perfume. Info: Boss The Collection pop-up runs from July 26 to 31, 10am to 9pm, at Paragon Shopping Centre, 290 Orchard Road. Register at Decorte introduces Onjun facials Decorte's Onjun facial. PHOTO: DECORTE The luxury Japanese beauty brand has introduced four rituals under its concept Onjun, a word formed by two kanji characters: on, meaning warm or gentle, and jun, meaning circulation. Designed to repair and revive stressed skin, each treatment incorporates expert hand massage techniques that are said to promote lymphatic drainage, paired with Decorte's most luxurious range, the AQ Meliority. Get pampered in town, ensconced in the brand's facial cabins at either Takashimaya Department Store or Paragon Shopping Centre. The menu includes options for the time-strapped, such as the express Essential Ritual ($85 for 35 minutes) or Luxury Ritual ($120 for 45 minutes) that comes with a 48-step head massage. For more indulgence, there is the Ultimate Lift Ritual ($320 for 90 minutes), featuring an illuminating plaster mask and 88-step massage encompassing the head, face, chest and hand. Every facial includes a two-day Aftercare Skincare Kit of samples to help prolong and maintain the post-facial effects. While stocks last, enjoy a one-for-one trial package deal on any treatment. Info: Available at Decorte's counters at Takashimaya Department Store (Level 1) and Metro Paragon (Level 2).
Business Times
an hour ago
- Business Times
Europe car sales drop the most in 10 months as EV growth slows
[FRANKFURT] Automakers called for Europe to further stimulate demand for battery-powered vehicles after sales of all new cars fell in June by the most in 10 months. Registrations dropped 5.1 per cent to 1.2 million vehicles, the European Automobile Manufacturers' Association said on Thursday (Jul 24). While demand for battery-electric cars continues to rise, sales grew at the slowest pace this year. 'Consumers clearly remain cautious, and more robust demand measures will remain a crucial element to get the transition up to speed,' the trade group known as Acea said. Europe's carmakers can ill afford any slack in demand for electric vehicles (EVs) in their home market. Volkswagen, BMW and Mercedes-Benz Group all continue to lose ground in China, where increasingly competitive domestic manufacturers are squeezing both their volume and pricing. Other major players are dealing with tumult in top management, with Stellantis having recently named a new chief executive officer and Renault seeking a permanent CEO. The European Commission has somewhat eased the pressure carmakers are under by granting them a three-year window to hit stricter carbon dioxide emissions targets that had been set to take effect this year. For those manufacturers that operate in the US, however, President Donald Trump's tariffs on imported vehicles and parts have put billions of euros' worth of earnings at risk. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The biggest source of volume decline last month was Germany, the region's largest auto market. Registrations fell 14 per cent in June and were down 4.7 per cent in the first half of the year. Sales also slumped 17 per cent in Italy and 6.7 per cent in France last month. Across the region, plug-in hybrids remain a bright spot. Registrations jumped 38 per cent in June as buyers increasingly opt for models that combine electric driving with a backup combustion engine. Fully EV sales rose 14 per cent for the month, helped by new-model launches and lingering government incentives in some countries. Still, adoption rates remain uneven across Europe, reflecting patchy infrastructure and divergent national policies. The UK last week reintroduced grants of as much as £3,750 (S$6,496) to support EV purchases, three years after the previous government ended subsidies for private buyers. New-car sales in the country rose 6.7 per cent in June. BLOOMBERG


Asia News Network
an hour ago
- Asia News Network
Japan PM Ishiba refutes reports of imminent resignation after surprise US trade deal
July 24, 2025 TOKYO – apan's embattled Prime Minister Shigeru Ishiba denied on July 23 that he was about to quit, saying there was 'not a single grain of truth' in source-based reports that said he would step down within weeks. News of a looming resignation, likely after key political events in August, had threatened to eclipse a surprise trade deal struck with the US just hours earlier, which shaved 'reciprocal' tariffs from 25 per cent down to 15 per cent. Despite Mr Ishiba's denials, the reality is that his position is increasingly precarious after his ruling Liberal Democratic Party (LDP) suffered a historic defeat in the Upper House election on July 20 , following a decisive trouncing in Lower House polls in October 2024. The crushing outcome has stirred the hornet's nest and might prove to be a career-ending blow, as the LDP and coalition partner Komeito now lack a majority in both Houses of Japan's bicameral Parliament. It remains uncertain whether the US trade deal, which was universally cheered by investors and economists, will quell the brewing civil war within the LDP and offer Mr Ishiba some breathing room. The Nikkei 225 index rallied, briefly soaring more than 1,500 points to a one-year high before paring some gains to close 1,396 points, or 3.5 per cent, higher at 41,171.32. The trade deal not only provided significant relief – the 15 per cent rate is the lowest so far among countries with a trade surplus with the US – but also spared Japan from making substantial concessions in its two 'sacred cow' industries: cars and rice. However, it does not erase the precedent of Japanese leaders resigning in disgrace after electoral setbacks, a fate Mr Ishiba is resisting .At a half-hour news conference on July 21, Mr Ishiba used the word 'responsibility' 10 times as he tried to justify his leadership. He held his ground when confronted about apparent double standards, having been vocal for then Prime Minister Shinzo Abe's resignation in 2007 after the coalition lost its Upper House majority in that year's election. Mr Ishiba countered that all he wanted was for Mr Abe to 'offer his sincere explanations as to why he should remain' – something he said he was now doing. He added that the LDP remained the largest party in the Diet, and cited the 'national crisis' of US trade tariffs as a reason why a political vacuum must be avoided. Now that this 'national crisis' has been averted, two schools of thought appear to have emerged within the LDP. One suggests that the surprisingly favourable agreement terms, after a battle that Mr Ishiba said was fought on ' national interests', could give him the tailwind to stay on, especially if future polls reflect improved public sentiment. Yet the prevailing opinion is that Mr Ishiba should depart – on a high note, with the trade victory – after a turbulent nine months in power. The movement to force him out if he does not quit of his own accord has been gaining traction. Younger and mid-ranking lawmakers, including political scions Yasutaka Nakasone and Takako Suzuki, are leading a petition for Mr Ishiba to resign. Local prefectural chapters from Hokkaido and Ibaraki, to Ehime and Kochi, have submitted formal letters requesting his resignation. According to LDP by-laws, members can force a party presidential election if a majority of lawmakers and prefectural delegates demand one. The party's election strategy chief Seiji Kihara even said that a hard reset was necessary to win back trust, suggesting that the LDP should cede power to the opposition. Two separate polls by Kyodo News and Yomiuri Shimbun this week, conducted before the trade deal was concluded, indicate that public opinion is divided over whether Mr Ishiba should quit, although a slight majority is in favour of his resignation. The Mainichi newspaper had cited unnamed sources as saying that Mr Ishiba 'will resign by the end of August', a timeframe chosen with the political calendar in mind. Mr Ishiba is slated to preside over war memorial services marking 80 years since the end of World War II, before welcoming top African leaders for a triennial summit on Japan-Africa cooperation. In the same month, the LDP will complete its post-mortem into the Upper House election results, which Mr Ishiba is expected to use as a basis for his future decisions. On July 23, Mr Ishiba sought a rare meeting with former prime ministers Taro Aso (2008-2009), Yoshihide Suga (2020-2021), and Fumio Kishida (2021-2024). He told reporters that the subject of his future was never raised during the 80-minute talks. 'Neither have I ever made statements that I will resign. There is absolutely no truth to the media reports,' he averred, adding: 'We shared a strong sense of crisis, that a split within the LDP must never occur.' He added that his immediate priority was to familiarise himself with the trade agreement, given that Japan exports more than 4,000 items to the US, and to ensure affected businesses receive the necessary support. The 15 per cent tariff rate has been broadly viewed in a positive light, with Ms Asuka Tatebayashi, a senior analyst at Mizuho Bank's global strategic advisory department, telling The Straits Times that the impact would be 'much lower and minimised' than the mooted 25 per cent. She added that no quota was set on Japanese car exports to the US, as was feared, while the deal puts an end to months of uncertainty for businesses. Tariffs on Japanese cars and car parts would be cut from 27.5 per cent to 15 per cent. And as Japan promised to buy more American rice, this would be done by increasing the ratio of US imports under an existing 'minimum access' framework that allows 770,000 tonnes of rice to be imported tariff-free per year, above which a duty of 341 yen (S$3) per kilogram is charged. Meanwhile, Japan would also inject US$550 billion (S$703 billion) of investments into various US sectors, including semiconductors, ships and steel. Chief trade negotiator Ryosei Akazawa, on his eighth trip to Washington, admitted that he did not expect to be able to conclude the deal on this visit. Former Japanese trade negotiator Sota Kato told ST that it was unclear what brought the deal across the finishing line now, adding that the LDP's Upper House defeat could have been a catalyst. 'The most plausible theory is that the US was in a hurry to seal the deal before the Ishiba administration is brought down and things have to start over,' said Dr Kato, who is now a research director at the Tokyo Foundation for Policy Research think-tank. He believed the deal's conclusion would hasten Mr Ishiba's departure, but wondered if Japan's next leader will come from the LDP, given that the ruling coalition does not hold a majority in the Diet. Regardless, political scientist Toru Yoshida of Doshisha University felt that behind-the-scenes horse-trading with the opposition will be inevitable, whether Mr Ishiba stays or goes. Or, he added: 'The LDP may try to secure a comeback through a snap election under a new prime minister.'