US dollar cuts its loss against the local currency.
IG Markets Singapore noted:
The greenback pared its three-day loss against the SGD last Friday, regaining the 1.227 level.
Last week ended with the release of US consumer sentiment data showing deterioration for a second consecutive month, with many citing the recent fiscal-cliff debate as their main concern.
As the market turned its focus towards the looming debt ceiling, some optimism is fuelled by the Republican’s push for a debt limit increase this week.
With US market closed for the holiday tonight and Obama’s inauguration speech due for release, many traders may be sitting on the side lines without major positions.
Meanwhile in Asia, more action and volatility is expected on the yen as the BoJ is due to release its interest rate and policy decision tomorrow.
With the USD/JPY flirting near the 90 level without been able to breach the level convincingly, a more aggressive, unexpected easing move is needed to have the currency pair trading above 90, as markets would have already factored in the low interest rate and dovish policy, yet to be announced.
OCBC Treasury Research meanwhile reported:
Early Monday, the SGD NEER is hovering around +0.76% above its perceived parity (1.2375) with the extreme strong end of the SGD NEER expected around 1.2195.
For today, expect the regional pairs to ply slightly more supported ranges with investors taking cues from unsteady Asian equities in early trade.
More From Singapore Business Review