Singapore dollar sits at $1.2525

The local currency is virtually unchanged against the US dollar amidst good and bad news.

IG Markets Singapore said:

The Singapore dollar is virtually unchanged against the greenback this morning with positive US economic news cancelling out negative data.

House price data came in better than expected while consumer confidence slumped last month.
This left traders with no fresh leads as to the likelihood of the Fed launching another round of QE later this week.

The Jackson Hole meeting on Friday could reveal the Fed’s thinking on the need for more dollar printing and has been dictating currency markets this week.

It is a game-changing event not just for the USD but for risk currencies, assets and world markets.

But it has led to a fairly lacklustre market in the lead-up. The Singapore dollar sits virtually unchanged at $1.2525 with little volume and action last night.

BK Asset Management meanwhile noted:

As we count down the days to Bernanke's annual testimony in Jackson Hole, the U.S. dollar has traded quietly higher against most of the major currencies.

The price action of the greenback over the past 24 hours suggests that investors are paring their short dollar positions ahead of this week's most important event risk.

When the FOMC minutes were released last Wednesday, investors readjusted their QE3 expectations by selling the U.S. dollar aggressively against all major currencies.

Since then, this reaction has abated as investors realize that they could be expecting too much from Bernanke. There is a good chance that Bernanke will let the market down come Friday by creating more confusion than clarity.

For this reason, we may get far more insight into future Fed policy from this Wednesday's Beige Book report than the Jackson Hole Summit.