Wed Apr 09 07:40:00 UTC 2025: ## Trump’s Tariffs Spark Safe-Haven Demand, Pushing Singapore Dollar Lower

**Singapore, April 9, 2024** – President Trump’s announcement of further tariffs on Chinese goods and planned trade talks with Japan sent shockwaves through the market, triggering a surge in safe-haven demand and putting pressure on the Singapore dollar against both the US dollar and the Japanese yen.

While the USD/SGD exchange rate remained relatively stable at 1.3528 on Tuesday, holding above the 1.31 support level, the SGD/JPY pair weakened, falling below the 110 mark to 109.2950. This shift reflects growing market anxiety.

Traders are aggressively buying dollar volatility hedging tools, driving up hedging costs to their highest level since November 2016, when Trump was elected. Bloomberg data reveals that one-week options tied to the Bloomberg Dollar Spot Index have risen for the third consecutive day and eight out of the last nine, indicating significant preparation for expected currency fluctuations.

The Bloomberg Dollar Spot Index itself jumped 0.6% on Monday, marking its largest two-day gain in over two years, following the tariff announcement. This reversed the index’s worst single-day performance since 2022, which had occurred immediately after the initial tariff news. Despite this recent rally, the dollar is still down nearly 3% year-to-date.

Market optimism surrounding the economic benefits of Trump’s policies has significantly cooled, with fluctuating White House messaging eroding investor confidence and dampening US growth forecasts.

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