USD/SGD May Test 1.40 If MAS Leaves Policy Unchanged: Analysis
(Bloomberg) -- After forming bullish rounding bottom pattern, USD/SGD may extend recent rally toward 1.40 in medium term if MAS leaves appreciation rate of $NEER policy band at 0% tomorrow, Bloomberg strategist David Finnerty writes.
- FX pair has rallied on USD strength on growing probability of Fed interest-rate hike by Dec.; Sept. FOMC minutes indicate last decision was close call
- MACD remains bullishly above zero and signal line; testing initial resistance at 1.3842, May 24 high
- USD/SGD may consolidate very near term if it works off overbought conditions; slow stochastics %D has overbought reading of 89
- MAS may leave policy stance unchanged given core CPI’s general trend this year has been higher and 3Q GDP is still forecast positive on y/y basis
- “Unless there is a marked deterioration in the global economy or significant shift to the inflation outlook, there is no need to change the monetary policy stance,” MAS Managing Director Ravi Menon said in July
- NOTE: USD/SGD rising for sixth day, up 0.1% at 1.3849
- MAS statement due for release at 8am local time on Oct. 14
- NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
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