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28 Mar 2013
Forex Flash: Buy USD/SGD on dips – Westpac
FXstreet.com (Barcelona) - The SGD should continue to outperform the EUR but we are skeptical as to how far it will rally against the USD. Indeed, Singapore data has been mixed this week. Inflation spiked higher but IP growth remained disappointing. Core inflation rose to 1.9% from 1.2% previously, which is still well below levels seen in the early part of last year. There is also a sense that inflation pressures should remain on easing trend throughout the rest of this year.
That is certainly in line with a fairly subdued growth outlook. The weakness in core IP growth (headline less biomed) is close to the lows we saw from late 2011/early 2012, which is when the MAS last eased policy. The MAS may not ease policy in April, however, at the very least the central bank should provide a dovish outlook for monetary.
“In turn this keeps us firmly in the buy on dips camp for USD/SGD. Between here and the cluster of moving averages – 50-day (1.2404), 100-day (1.2315) and 200-day (1.2369), is where we would look to average into a long position.” notes the Westpac Asian Strategy Team.
That is certainly in line with a fairly subdued growth outlook. The weakness in core IP growth (headline less biomed) is close to the lows we saw from late 2011/early 2012, which is when the MAS last eased policy. The MAS may not ease policy in April, however, at the very least the central bank should provide a dovish outlook for monetary.
“In turn this keeps us firmly in the buy on dips camp for USD/SGD. Between here and the cluster of moving averages – 50-day (1.2404), 100-day (1.2315) and 200-day (1.2369), is where we would look to average into a long position.” notes the Westpac Asian Strategy Team.