Singapore dollar holds onto gains

Against the Singapore dollar the greenback has slipped in the last week from above $1.27 to currently trade at $1.2575.

IG Markets Singapore said:

The Singapore dollar has held onto the gains it clocked up against the greenback as it sits below the $1.26 level.

The US dollar has been caught in the crosshairs this week with Ben Bernanke addressing politicians midweek.

Traders have been hanging on every word hoping for clues as to if and when QE3 might happen.

The dollar has been swinging in and out of favour based on these comments and is on the downside as more traders rule in a fresh bout of monetary easing.

Against the Singapore dollar is has slipped in the last week from above $1.27 to trade at $1.2575 this morning.

BK Asset Management meanwhile noted (for 18 July 2012 trading):

The concurrent rally in the U.S dollar and U.S. equities imply good news relating to the U.S. economy but unfortunately the price action is misleading because this morning's U.S. housing market numbers were mixed and according to the Federal Reserve's Beige Book report there are more signs of slower economic activity in the 12 Fed districts.

For the Federal Reserve who uses the Beige Book to decide if monetary policy changes are needed, there was nothing surprising in today's report.

DBS Group Research, on the other hand, reported:

There is some optimism that the economic slowdown in the US and China may not be as bad as initially thought. This helped to mitigate worries of the Eurozone crisis leading to hard landings in the world’s two largest economies.

Assuming no disappointment in today’s US existing sales data, the market is hoping to build on yesterday’s stronger US housing starts data. Never mind that Fed Chairman Ben Bernanke did not signal that QE3 was imminent, the willingness to deploy the safety net when necessary would suffice for now.

In China, the outperformance of property stocks in the first half of 2012, coupled with recent interest rate cuts and liberalization measures, have led some to believe that the sub-8% GDP growth in 2Q12 may be the low point for the cycle.

Then again, the Shanghai Stock Exchange Property sub-index has, in reality, been in range since 2Q12. In fact, it has been retreating back to the lower limit of this range from its last peak earlier this month. Unless it improves from here, it is still too early to conclude anything substantial other than fatigue from the Eurozone crisis.