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DOLLAR-SING: USDSGD has edged lower today in line....>

DOLLAR-SING: USDSGD has edged lower today in line with strength in the euro and
Chinese yuan, with the latter benefitting from alleviated fears of a trade war
following Chinese Pres. Xi's pledge for greater openness.
- USDSGD continues to operate within a contracting range, with resistance coming
in at 1.3200, marking the April 6 high, and support coming in at around 1.3050.
- We see scope for the pair to move lower as the broader downtrend resumes. The
trigger for further weakness is likely to come from the MAS's policy decision,
due on April 13. The bank is widely expected to strengthen the currency by
increasing the rate of appreciation of the currency's policy band.
- Such a move would likely result in gradual SGD appreciation against a basket
of its trading partners, and most likely against the greenback. Given the lower
rates of inflation in Singapore compared to its trading partners over recent
years, the SGD's real effective exchange rate has fallen to a 6-year low, and
given the country's solid external position, a resumption of long-term strength
looks likely.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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