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Local currency edges higher against peers


Singapore dollar trades basically unchanged despite ‘disappointing’ export data.

IG Markets Singapore reported:

The Singapore dollar edged higher against most of its peers, but still remains relatively range bound.

USD/SGD is trading either side of the 1.2240 support level, which seems to continue to hold back further SGD gains for the moment.

Non-oil Domestic Export (NODX) December trade data was released this morning and showed a marginal rise month on month, but a significant 16.3% drop compared to December 2011. The monthly improvement of a seasonally adjusted 1.8% rise in non-oil exports was not as strong as had been forecast by Economists, who in a Reuters poll, had expected more than a 6% rise month on month.

The contraction in the electronic exports and pharmaceutical shipments were noted as areas of large decline and given that last year’s numbers were boosted by a number of rig deliveries, the 2011 numbers were always going to be tough to beat.

The reaction to this disappointing data has been relatively muted in the FX space with the SGD trading basically unchanged.

OCBC Treasury Research meanwhile noted:

The starkly disappointing Dec non-oil domestic exports numbers out of Singapore this morning may discourage outright SGD bulls in the near term with the SGD NEER currently around +0.88% above its perceived parity (1.2345).

At current levels, the extreme strong end of the NEER fluctuation band is estimated at around 1.2165, and this should provide a solid floor for the USD-SGD intra-day.

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