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8 Jan 2015
adding to existing long USD/SGD position - Nomura
FXStreet (Bali) - Nomura FX Strategists are adding to their existing long USD/SGD position, arguing that market expectations of the MAS easing its FX appreciation stance at the April 2015 rises should weigh on the SGD.
Key Quotes
"In Singapore, we expect the MAS to leave its FX policy unchanged at its next meeting given its focus is still firmly on the pass through from wage pressures (given tight labour market) to core inflation."
"However, the MAS in its November 2014 inflation statement acknowledged that core inflation could come in slightly below its 2015 forecast range of 2-3% if low global oil prices sustain."
"In addition, with weak growth, market expectations of the MAS easing its FX appreciation stance at the April 2015 may rise."
"Beyond domestic factors that could pressure the SGD, the currency is also very sensitive to broad USD strength given its basket-driven nature and as it is highly exposed to China slowdown risks. Therefore, we are adding to our existing long USD/SGD position."
Key Quotes
"In Singapore, we expect the MAS to leave its FX policy unchanged at its next meeting given its focus is still firmly on the pass through from wage pressures (given tight labour market) to core inflation."
"However, the MAS in its November 2014 inflation statement acknowledged that core inflation could come in slightly below its 2015 forecast range of 2-3% if low global oil prices sustain."
"In addition, with weak growth, market expectations of the MAS easing its FX appreciation stance at the April 2015 may rise."
"Beyond domestic factors that could pressure the SGD, the currency is also very sensitive to broad USD strength given its basket-driven nature and as it is highly exposed to China slowdown risks. Therefore, we are adding to our existing long USD/SGD position."