About Singapore Dollar (SGD) for traders and investors
Singapore Dollar trivial
- The Singapore Dollar is the official currency of Singapore.
- It is also accepted in Brunei as a ‘customary tender’ due to agreement between Monetary Authority of Singapore (MAS) and Brunei Currency and Monetary Board.
- Singaporeans call it SingDollar.
- Global turnover in Singapore Dollars stand at 15th place based on 2013 survey by BIS.
- Based on 2010 results of the same BIS survey, Singapore Dollars was placed 12th on global turnover.
- Singapore manages its economy through the Singapore Dollar exchange rate rather than interest rate. This is because most of Singapore’s inflation is imported.
Singapore Dollar trend and technical analysis
June 2014 – Singapore Dollar is strengthening based on USDSGD currency pair. This is the dominant trend for past few years. For now the pair is consolidating inside a triangle since 2011. If the pair continues down as the chart pattern is associated with, SingDollar will continue to strengthen against the USD.
Singapore Dollar for trading; Spot CFDs and Futures
Trading spot price through CFDs
Traders can trade spot prices of some of the following SingDollar currency pairs using CFDs or Contract For Differences. These are leveraged forex trades.
Brokers that offer leveraged forex trading in Singapore have to be regulated by MAS. A list of regulated brokers can be found here. Traders can also used any number of forex brokers located outside Singapore but one has to be wary of forex scams.
MAS mandates that forex leveraged offered to traders are capped at 50 times. Other brokers may offer leverage up to maximum leverage of 800 times. Leverage lets traders take on large position sizes with very little margin but a small mistake can also wipe out trading capital.
June 2014 – USDSGD is one of Asian foreign exchange futures launched by Singapore Exchange (SGX) on 11 November 2013. It is a new product compared to spot CFDs which were promoted as early as 2006. We are looking forward to SGX and brokers offering USDSGD futures make it easy for individuals to adopt.
Singapore Dollar as a long term currency investment
The Singapore Dollar is an attractive long term currency investment; USD to SingDollar exchange rate was at high of 1.8315 back in 2001 but the low of August 2011, the Singapore Dollar had strengthened to an exchange rate of 1.1986.
How to invest in the Singapore Dollar
Investors can invest in a Singapore Dollar ETF or exchange traded fund by Guggenheim Investments. The product is called CurrencyShares Singapore Dollar Trust (Symbol FXSG) and tracks the SGD/USD exchange rate.