The Singapore dollar has rallied to a 4 ½ -month high against the US currency on Friday tracking a rise in Chinese and Indian currencies.
USD/SGD dropped to 1.3791, its lowest since mid-October last year and from the previous 1.3883. The move translates to a 0.67% gain in the local dollar.
The Singapore dollar has been rising since 29 February and it has strengthened nearly 2.4% against the greenback by Friday.
Meanwhile, the Chinese yuan rallied to a 2-week high of 6.5153 in the spot market from its previous close of 6.5365.
The Singapore currency has been at the mercy of the yuan thanks to the significance of the Lion's City's trade size with the world's second largest economy.
Moreover, that the Chinese unit has been under pressure for devaluation concerns of late, any reversal in that currency should positively impact the Singapore dollar.
The Peoples bank of China had placed the central parity rate of USD/CNY 128 basis points down to 6.5284 on Friday, according to the China Foreign Exchange Trading System, triggering the rally.
In addition, the Indian rupee rallied to a seven-week high of 67.21 against the US adding up the gain of the local unit so far this week to 2.0%.
