The Singapore dollar weakened against the US dollar on Tuesday morning after data showed that non-petro exports plunged 11% in September. Ahead of the data’s release, analysts had forecast an unchanged reading.
September’s number means that Singapore’s exports declined on an annual basis by 1.1%, from growth of 16.7% in the year to August.
The week ahead should be an interesting one for Asian financial markets, with the highlights being China’s 19th National Congress, the latest numbers for Chinese economic growth, the Bank of Korea’s monetary policy meeting and Japanese trade data.
Further to that, and to the events outlined below, investors should look with care to Federal Reserve speakers on Sunday and Wednesday (Asian time zones) and to Tuesday’s US data for industrial production, all of which may influence risk appetite and, of course, the dollar side of Asian FX pairs.
In spite of robust economic data, the Singapore dollar weakened on Friday to 1.354 per US dollar and to 1.604 per euro, from 1.3515 and 1.5992 respectively.
Singapore’s Ministry of Trade and Industry (MTI) said on Friday that preliminary GDP for the third quarter grew by an impressive 6.3%; nearly twice the market forecast of 3.2%.
Currencies in Asia have begun the week slowly and also with contrasting performances against the FX majors.
Against the dollar, while all of Asia’s ten most active currencies have fallen marginally on Monday morning, many hold slight gains or remain unchanged against the euro. Little movement has been seen against the yen.
The Singapore dollar has begun the week cautiously.
Against the US dollar, having risen on Friday to a one-year high of 0.7493, the currency of Asia’s ‘Lion City’ conceded some ground on Monday and Tuesday, with SGD/USD falling back below 0.745. A retreat in the pair was likely given last week’s approach to major technical resistance at 0.75 and Hurricane Irma’s last-minute detour which thankfully spared the US from a worst-case impact.
Most Asian currencies ended Wednesday higher against the dollar, albeit on a rather unspectacular day of trading. With a few exceptions, markets traded quietly ahead of the Jackson Hole symposium (24-26 August) at which Fed Chairwoman Janet Yellen and ECB President Mario Draghi might give important updates on monetary policy.
The star of the day in Asia was without doubt the Korean won.
The New Zealand government piled misery onto the New Zealand dollar on Wednesday with its announcement that it had revised downward its forecasts for economic growth this year and next. Treasury officials said that growth for the year to June 2017 would likely come in at 2.6%, from earlier expectations of 3.2%, and have forecast 2018 growth of 3.5%, down from May’s forecast of 3.7%.
Amid growing tensions between the US and North Korea, investors fled on Thursday to the safety of the Japanese yen, gold and Treasuries.
Earlier this week, US president Donald Trump had promised to lay “fire and fury” on North Korea should any attempt be made by the rogue nation to harm the US.