Monetary Authority of Singapore Cuts Inflation Outlook, Depreciates Singapore Dollar
- The fourth central bank surprise action this month comes from Singapore, where the central bank decided to pursue an accelerated depreciation of the Singapore dollar due to a deteriorating inflationary outlook.
January 2015 might remain in history as the month with the most central bank surprise decisions forced onto the Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term markets. First there was the Swiss National bank turmoil, closely followed by the Bank of Canada cutting rates, a very unexpected decision.
After the ECB’s press conference last week, one wouldn't imagine that there to be much left on the line. However, this morning the Monetary Authority of Singapore (MAS) became the fourth institution to surprise markets with its monetary policy decision.
In order to conduct monetary policy and balance its inflation outlook, the MAS is maintaining a managed float on the Singapore dollar’s Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term rate.
The central bank cited the deteriorating domestic inflation outlook, outlining that the rate at which the Singapore dollar appreciates should be decreased in order to counteract downside pressure. While the Singapore dollar has been depreciating since April 2012, the central bank has maintained a stance of allowing appreciation at a rate of the slope of the trend.
Worries about the rate against the euro and South-East Asian currencies are prevailing, as the broad based US dollar rally has been offsetting any prospects of depreciation versus the basket of currencies, which are some major trading partners of Singapore.
In reality the US dollar has been rallying faster against the euro and a number of Asian currencies, which has led to a lack of results from the tightening of monetary policy by gradually forcing the Singapore dollar only lower.
Following the move, the currency has depreciated about 1%, which is quite a lot for a single day in a central bank-managed currency.
USDSGD Hourly Chart, Source: NetDania
January 2015 might remain in history as the month with the most central bank surprise decisions forced onto the Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term markets. First there was the Swiss National bank turmoil, closely followed by the Bank of Canada cutting rates, a very unexpected decision.
After the ECB’s press conference last week, one wouldn't imagine that there to be much left on the line. However, this morning the Monetary Authority of Singapore (MAS) became the fourth institution to surprise markets with its monetary policy decision.
In order to conduct monetary policy and balance its inflation outlook, the MAS is maintaining a managed float on the Singapore dollar’s Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term rate.
The central bank cited the deteriorating domestic inflation outlook, outlining that the rate at which the Singapore dollar appreciates should be decreased in order to counteract downside pressure. While the Singapore dollar has been depreciating since April 2012, the central bank has maintained a stance of allowing appreciation at a rate of the slope of the trend.
Worries about the rate against the euro and South-East Asian currencies are prevailing, as the broad based US dollar rally has been offsetting any prospects of depreciation versus the basket of currencies, which are some major trading partners of Singapore.
In reality the US dollar has been rallying faster against the euro and a number of Asian currencies, which has led to a lack of results from the tightening of monetary policy by gradually forcing the Singapore dollar only lower.
Following the move, the currency has depreciated about 1%, which is quite a lot for a single day in a central bank-managed currency.
USDSGD Hourly Chart, Source: NetDania