The local currency is trading back above 1.23 against the greenback.
IG Markets Singapore said:
The Singapore dollar has weakened to trade back above 1.23 against the US Dollar. Having moved away from the key 1.2240 support level we had been testing for some time we have now moved back to try and recapture the 1.23 level for the first time since 8th January.
On the whole the greenback remains mostly unchanged versus most of its peers as the US market was closed on Monday for the Martin Luther King, Jr. Day. Obama’s inaugural address - which addressed the often controversial topics of gun control, gay rights, climate change and immigration – was delivered in a quiet session. It didn’t provide much inspiration for traders of the greenback.
The euro stayed firm against the SGD, trading near 1.635. Eurozone crisis concerns eased as the Bundesbank said that Germany’s economy could have already bottomed out and European finance ministers talked about a bailout of eurozone small island nation, Cyprus.
Much of the focus on the FX space remains on the yen as traders have their ears peeled for BoJ’s interest rate announcement and press conference, due for release later today.
With an expectation of a new two percent inflation target and a 10 trillion yen asset-buying programme on the cards, the BoJ would need to announce an even more dovish stance or an open-ended programme to not disappoint the market.
The USD/JPY trades near 89.6 as yen bulls and bears play tug-of-war ahead of the direction the Japanese government will set on their currency. With a possible near-term support at 89.4, a level the USD/JPY has previously bounced off as traders take positions on the yen’s strength, the currency pair will remain closely watched today.
OCBC Treasury Research meanwhile reported:
This morning, the SGD NEER is relatively stable around +0.62% above its perceived parity (1.2390) with the extreme strong end of the NEER fluctuation band estimated at around 1.2210.
In the current environment however, expect the pair to potentially look northwards towards 1.2350 intra-day.
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