The local currency hit a one-year high against the US dollar and trades at $1.2215.
IG Markets Singapore said:
The Singapore Dollar continues to benefit from a weak US dollar this morning threatening to break through the $1.22 barrier.
Last week's long-awaited Fed announcement on QE3 saw the greenback lose significant ground against major currencies.
The local currency hit a one-year high against USD as a result and trades at $1.2215 this morning having held onto these gains.
But the Singapore dollar may face a test to break through the $1.22 barrier, if the QE3 honeymoon subsides.
However, unlike other Fed policy easing exercises, QE3 will drip-feed $40 billion into the economy each month rather than one huge cash injection so the effects could last longer and keep the greenback pegged in the short-term.
More From Singapore Business Review