DOLLAR-SING: USDSGD is drifting higher in line.......>

DOLLAR-SING: USDSGD is drifting higher in line with the greenback's broad-based

rally and currently sits at 1.3448, having so far failed to cleanly break out of

its pennant formation in place since early May.

- As we argued in a previous article "Greenback Has Further Upside Vs Singapore

Dollar" (For Full Story See Main Wire At 08:17 GMT 05/16) we expect the SGD to

gradually weaken vs the USD as the greenback continues to benefit from its real

rate advantage globally, but strengthen vs its Asian and EM peers. 

- The Singapore dollar has recently begun to outperform against the Chinese yuan

and remains near all-time highs relative to the Deutsche Bank Emerging Asia FX

index - a more equally weighted regional FX basket compared with the ADXY.

- Outperformance vs EM FX should continue as the MAS maintains its policy of

appreciation against its basket. The MAS will not meet again until September.