SGD: USD/SGD Consolidates After 1.2800 Break Lower, Exports Miss
USD/SGD has stabilized in the 1.2760/65 region, after breaking sub 1.2800 in Tuesday trade. Session lows today were at 1.2751, just late July lows. In early July the pair got just under 1.2700. On the topside, meaningful resistance is likely around the 100-day EMA, near 1.2910.
- Some consolidation in USD/SGD today is consistent with broader USD trends, with dollar indices up a touch after Tuesday's sharp fall.
- Earlier we also had much weaker than expected August export figures. Headline exports were down -11.3%y/y, against a 0.8% forecast and -4.7% July outcome. Electronic exports were down -6.5%y/y, after a 2.7% gain in July. In the month though, electronic shipments were up 4.6%, so base effects played a role. Weakness was evident for most sub-categories and by country (in y/y terms).
- These trends are underperforming other EM Asia export hubs, most notably Taiwan (where export growth is still above 30%y/y)
- If export weakness continues it may bring MAS easing risks back into play. The chart below plots the SGD NEER in y/y terms against Singapore export growth, which is smoothed by taking the 3mth moving average, but is also 6 months ahead. Next week we get Aug inflation data.
- The next MAS policy meeting will be held in Oct.
Fig 1: SGD NEER Y/Y & Singapore Export Growth, 3mth Average (6mths Forward)
Source: Bloomberg Finance L.P./MNI
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