The Singapore dollar would gain throughout most of the Asian trading session with the USDSGD falling as low as 1.4015. Foreign banks were the primary buyer as the growth outlook for the U.S. was diminished by comments from Jeffrey Lacker of the Richmond Fed, that inflation would continue to weigh on consumers.
Talking points
• Singapore Dollar Strengthens on Bleak U.S. Outlook
• USDHKD Consolidating at 7.8080
• Heng Seng Index Falls Over 1%
Singapore Dollar Reverses Earlier Gains on Euro Weakness
The Singapore dollar would gain throughout most of the Asian trading session with the USDSGD falling as low as 1.4015. Foreign banks were the primary buyer as the growth outlook for the U.S. was diminished by comments from Jeffrey Lacker of the Richmond Fed, that inflation would continue to weigh on consumers. However, Euro weakness would lead to the pair giving back some i=of its earlier gains reaching above the 1.4045 price level.
A bout of profit taking would push the USDHKD as low as 7.8040 before consolidating around the 7.8080 price level. At that point te p[airt had fallen over a 100 points from the weekly high of 7.8148. The Heng Seng Index was down over 1% on the day which helped keep the pair in check despite the dollar weakening against most crosses.
U.S. trade balance report presents the only event risk on the calendar, with expectations that the deficit widened. If the increase was due to decreasing exports, the dollar may trade heavy following the report as that source of growth for the economy may be fading. The recent dollar strength will only further weigh on demand for exports and the U.S. economy will have to look domestically to fill the void.
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