The USD/SGD currency pair held in proximity to a 10-week high of 1.2917 on Monday, as the latest stronger-than-expected US Non-farm Payrolls report added to US Dollar strength.
The US economy has generated 172,000 jobs in May, exceeding the 85,000 consensus forecast and surpassing the prior month’s upwardly revised figure of 179,000. The US unemployment rate remained at 4.3%, matching expectations.
The data reinforced expectations that the Federal Reserve would likely maintain a hawkish policy stance.
Concerns that the war-related surge in energy prices could stoke inflation are also adding to expectations of tighter US monetary policy. As per the CME Group’s FedWatch Tool, market participants are currently assigning more than a 70% probability that the Federal Reserve will raise interest rates by at least 25 basis points this year.
This outlook, combined with ongoing geopolitical risks, will likely remain supportive factors for the safe-haven US Dollar. The United States and Iran still differ on a number of significant issues, including Tehran’s nuclear activities and the status of the Strait of Hormuz, which keeps geopolitical risk elevated.
The USD/SGD currency pair was last up 0.11% on the day to trade at 1.2910.
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