Currency Briefing - what you need to know for Tues April 10, 2012

The local currency currently trades at $1.2608 against the greenback.

IG Markets Singapore said:

The Singapore dollar has held steady against the US dollar despite some ill winds towards risk sentiment blowing in from the West. It currently trades at $1.2608.

Global markets are still reeling from the disappointing US employment figures released on good Friday. Many markets have been closed for the Easter break and are opening to bad news.

Questions are being asked as to the US economic recovery, and that of the global economy, which has dented risk sentiment and affected Asian currencies, with the exception of the yen.

But Singapore has its own issue to deal with this week as the Monetary Policy of Singapore (MAS) meets to discuss interest rates and monetary policy on Friday.

The MAS is worried about inflation staying stubbornly high. A strong local currency helps to cap both imported and domestic inflation.

Expectations are for the MAS to keep its policy of gradual appreciation unchanged.

RBS meanwhile noted:

CFTC positioning data was released on Friday covering the week ended Tuesday, 3 April.

Speculators reduced their net short EUR position by just under 10K contracts but are still 79.4K contracts net short. While the position is still fairly large, this compares to a 171K net short position in late January.

The JPY position was about unchanged at a net short 65K contracts, holding near its largest net short since 2007.

Speculators added to net longs or reduced net shorts in each currency tracked except for AUD, where non-commercial accounts reduced their net long exposure to 49K contracts from previous 59K.