Forex Investment and Currency Trading

USD/SGD
Sport 1.36
3 month forecast - 1.35
6 month forecast - 1.34
12 month forecast - 1.32
The SGD was essentially steady in June after appreciating sharply earlier in the year after the Monetary Authority of Singapore’s (MAS) re-fixed the central rate within the policy band. Subsequently, the MAS reiterated that it would maintain its three-year-old policy of allowing a “modest and gradual” appreciation against a trade-weighted basket of foreign currencies. The appreciation is likely to help fight imported inflation. Market forecasts the currency to strengthen steadily over the course of the next 12 months.
Inflation soars: The CPI climbed 6.6% y/y in 1Q, the [...]

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The pair pushed up against the 55 dma at 1.3750 and a close above there would suggest further Short Term gains towards the top of the bearish channel which is at 1.3970. Beyond that resistance comes in at 1.4130/60 which was the low is February ’08 and also the low in June 1997.

Straits
The index is struggling to sustain above the November ’07 low at 3,265 and a close below 3,153 this week would mean a bearish weekly reversal is posted arguing for further Short Term losses. Note that additional resistance lies ahead at 3,340 (55 wma). Additional gains on this index [...]

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Today the Monetary Authority of Singapore (MAS) announced a modest monetary tightening. In the twice yearly monetary policy statement (MPS) it maintained its FX stance of a “modest and gradual appreciation” of the Singapore dollar (SGD) nominal effective exchange rate (NEER) which had been “increased slightly” in the previous policy statement announcement in Oct-071. Also importantly, due to rising inflation risks, the central bank opted for a one-off re-centring of the SGD NEER policy band at the current level of the SGD NEER. The last time there was a re-centring was back in July-03, with the mid-point set at the [...]

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Overview:
Following the Taiwanese Presidential election, where KMT won by a wide-margin, USDTWD has broken below the 30.2 level and USDTWD vols have been better bid across the curve. 1-month USDTWD was paid at 12.5% in Asian trading. Risk reversals have softened in the direction of the USD put.  With USDKRW spot stabilizing around 1,000 front end USDKRW vols have softened, with 1-month USDKRW now at 9.65%.   USDKRW risk reversals remained very bid as the market is long vol in the 920-930 and trying to take profit on it. 
Singapore
February CPI came in lower than expected at 6.5% yoy, and a [...]

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