USDSGD and The Coat Tail Effect of Indonesia
9 days into the second half of 2014 and USDSGD makes its year to date low of 1.24 19 oops 1.2418 as I type and Jowoki becomes the new Indonesia President.
Think nothing of it. Have you seen the Rupiah ? Ringgit ? Peso ? Rupee ? and Baht ?
Against the USD since 1 Jul 2014.
- SGD +0.35%
- MYR +1.25%
- IDR +2.05%
- PHP +0.64%
- INR +0.56%
- THB +0.34%
I got the USDSGD (1.28) wrong last month but the SGDMYR (2.55) right which I like to think as face saving. https://tradehaven.net/market/fx/fx-usdsgd-the-time-has-come/
It is definitely out of every single central bank within our vicinity’s hands. It is up to the Fed and the FOMC minutes tonight, BOJ monetary policy meeting and Yellen’s Humphrey Hawkins testimony on the 15th.
Anything remotely un-hawkish, and by that I do not mean dovish, will send the market into ecstasy of 2010-2014 carry trades all over again.
Back to regional developments, if we juxtapose the USDINR chart onto the USDIDR chart for the election effect, we should see USDIDR under 11,000 in a couple of sessions. Much like Malaysia and gang for their elections last year like I pointed out in March and in Jan this year. https://tradehaven.net/market/fx/umami-in-india-elections-discussion-and-opportunities/
The USDSGD will ride on the coat tails for effect but the SGDIDR is unlikely to maintain its lofty highs unless we see an exodus of money from Jokowi rivals, seeking refuge which would have happened in March during the parliamentary elections; or any signs of social unrest etc. post elections, which is unlikely given the populist results.
Thus it would not be too ambitious to aim for sub 9,000 in the SGDIDR. Buy some IDR bonds if you can, through your favourite local brokerage firm or the stocks or even the apartments that Jokowi has promised will be made available to the world. http://www.businessweek.com/news/2014-07-03/jokowi-to-let-foreigners-buy-indonesia-property-in-bid-for-taxes
Getting a lift from another’s coat tails is the best Singapore can manage at the moment and the USDSGD is doing just that.
What happens when the ride is over ?
Just like in the case of the Malaysian elections, life goes back to normal for Singapore and the USDSGD.