HALISTER1: Zero Singapore Dollar Appreciation Works One Month On: Analysis

Zero Singapore Dollar Appreciation Works One Month On: Analysis

(Bloomberg) -- The proof is in the pudding. One month after Singapore shifted to zero currency appreciation, the local dollar has held mostly steady against a basket of trading partners currencies, Bloomberg strategist Mark Cranfield writes.
  • Since MAS eased policy on April 14, most of SGD’s declines against key trading partners like USD, GBP, EUR, JPY have been offset by gains vs other currencies such as AUD, CNY and MYR
  • Click here for a chart of some SGD cross rates
  • SGD is now around 0.5%-0.6% below mid-point of undisclosed NEER trading band
    • Since April 14, SGD NEER hasn’t deviated more than 1.0% above or below its mid-point, according to bank analysts including OCBC, Maybank and UOB
  • Singapore interest rates have also moved little in past month
  • Comparison of current levels with April 14:
    • SGD 1-year swaps 1.4250% vs 1.4900%
    • Sibor 1-month 0.75434% vs 0.73751%
    • 10-year bond yields 1.939% vs 1.966%
  • NOTE: Singapore to ease FX policy in next 12 months: CS
  • NOTE: Mark Cranfield is an FX strategist who writes for First Word. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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