EM ASIA FX-Singapore dollar back near 7-mth low as Q3 GDP contracts; baht up

Source : REUTERS
Last Updated: Fri, Oct 14, 2016 08:00 hrs

* Singapore dlr briefly up after MAS stands pat * Baht gains on hopes for calm after king's death By Jongwoo Cheon SINGAPORE, Oct 14 (Reuters) - Singapore's dollar quickly gave up early gains and sank to near seven-month lows on Friday after the trade-reliant economy unexpectedly contracted in the third quarter. Though the city-state's central bank kept policy unchanged as expected earlier in the day, the disappointing GDP reading and gloomy global outlook kept market expectations for future easing alive. The Thai baht rose on hopes for calm after King Bhumibol Adulyadej, the world's longest-reigning monarch, died on Thursday. The Singapore dollar briefly firmed after the central bank left policy unchanged, but then eased as much as 0.4 percent to 1.3865 per the U.S. dollar, similar to Thursday's low of 1.3869, its weakest since March 10. The economy shrank 4.1 percent in July-September on a seasonally adjusted annualised basis from the previous three months, defying the median forecast of a 0.3 percent growth. Despite the disappointing economic data, the Monetary Authority of Singapore (MAS) kept the width of the policy band and the level at which it is centred unchanged, maintaining the rate of appreciation of the Singapore dollar policy band at zero percent. Traders said the Singapore dollar briefly firmed after the decision as some investors had unwound bets on easing, but investors quickly took the rebound as a chance to sell. "If global macro and price pressures deteriorate precipitously in the intervening months to April 2017, we would lean towards a re-centring lower," said Emmanuel Ng, foreign exchange strategist at OCBC Bank, in Singapore. "The disappointing Q3 GDP and somewhat dovish overtones in the policy statement may leave the USD/SGD looking for further hard room on the upside if broad USD resilience re-emerges," Ng said. OCBC Bank retains its tactical objective for the Singapore dollar at 1.4040 against the greenback, he added. The MAS reviews its exchange-rate based monetary policy twice a year, in April and October. It surprised markets by easing in April. It manages monetary policy by changes to the exchange rate, rather than interest rates, letting the Singapore dollar rise or fall against the currencies of its main trading partners because trade flows dwarf the city state's economy. CURRENCIES VS U.S. DOLLAR Change on the day at 0131 GMT Currency Latest bid Previous day Pct Move Japan yen 103.85 103.72 -0.13 Sing dlr 1.3841 1.3815 -0.19 Taiwan dlr 31.666 31.760 +0.30 Korean won 1128.90 1135.90 +0.62 Baht 35.10 35.55 +1.28 Peso 48.280 48.340 +0.12 Rupiah 13040 13075 +0.27 Rupee 66.93 66.93 +0.00 Ringgit 4.2035 4.2110 +0.18 Yuan 6.7223 6.7256 +0.05 Change so far in 2016 Currency Latest bid End prev year Pct Move Japan yen 103.85 120.30 +15.84 Sing dlr 1.3841 1.4177 +2.43 Taiwan dlr 31.666 33.066 +4.42 Korean won 1128.90 1172.50 +3.86 Baht 35.10 36.00 +2.56 Peso 48.28 47.06 -2.53 Rupiah 13040 13785 +5.71 Rupee 66.93 66.15 -1.17 Ringgit 4.2035 4.2935 +2.14 Yuan 6.7223 6.4936 -3.40 (Reporting by Jongwoo Cheon; Editing by Kim Coghill)



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