The Singapore dollar was stable late in Asia on Monday after falling in New York trade on Friday as a weaker-than-expected increase in US non-farm payrolls disappointed global markets.
The US dollar was quoted at S$1.2713 in the closing hour of the Asian session, having stayed in a narrow range of S$1.2704-S$1.2742 through the day. On Friday, the greenback was quoted at S$1.2681 around the same time.
The US unit is likely to stay rangebound for the next few days as investors await economic growth numbers in China and Singapore, due Friday, and the earnings season kicks off. A Dow Jones analysis tipped the greenback to find support at S$1.2700 and face resistance near S$1.2850.
“The market will watch events in the US and Europe for sure, but this week the focus is on China and Singapore growth data. It’s interesting how two such diverse economies can tell us so much about the health of the global economy,” said an analyst at a regional bank.
According to a government minister, the strengthening of Singapore’s currency in recent years has created some challenges for local businesses, but the government doesn’t expect any severe foreign-exchange impact on the city-state’s export competitiveness.
“If you look at the exchange-rate movement in general, whilst it has posed some challenges to our businesses, at the same time our export performance continues to be there in positive territory,” S. Iswaran, the second minister for trade and industry, said in Parliament in response to a lawmaker’s question.
Separately, another minister said that capital flows into Singapore have receded in recent months as investors have shifted assets back to developed markets, but the government remains wary of any resurgence in short-term capital inflows and the impact this may have on local asset markets.
“We cannot rule out Singapore seeing a resurgence of capital inflows given our strong macroeconomic fundamentals,” Lawrence Wong, minister of state for education and defense, said in Parliament in response to another question.
“The impact of foreign money flows on the property market has been a concern,” said Wong, who is also a board member of the Monetary Authority of Singapore. “We will continue to monitor closely the impact of capital inflows on the domestic economy, and especially on our asset markets, to ensure that these flows do not threaten the stability of the financial system or the property market.”
Singapore government bonds were little changed as the market awaited fresh trading cues.