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Archive for the ‘Currencies’ Category

S$, Baht & Rupiah looking gd

In Currencies, Indonesia, Japan, Malaysia on 13/02/2014 at 4:43 am

Given that a senior cabinet minister and NTUC chief, and a jnr minister from NTUC is giving the PAP govt a bad name, maybe it’s time to remind S’poreans that the PAP govt is not all full of NTUC clowns. On Tueday I reported that Khaw and MoM Tan had the developers concerned, and today I’ll remind S’poreans that PM’s economic team (headed by Tharman) are keeping int’l investors onside (too bad about TOC, TRe readers, but then they can take comfort that locals like me too like a strong S$.)

(4 Feb) – Recent alarmist commentary may have stirred up concerns about Singapore’s economy, but in the midst of the emerging market rout, safe-haven seekers’ faith appeared unshaken as they scooped up its currency.

“We have noted its safe-haven status within the Asian region is getting stronger in past years. So when you have a broad risk off, in general the Singapore dollar will outperform,” said Ju Wang, senior foreign-exchange strategist at HSBC.

Earlier this week, global markets largely sold off, but the Singapore dollar strengthened, with the U.S. dollar fetching as little as 1.2666 on Tuesday, compared with around 1.2790 Friday. Against the currency of its neighbor Malaysia, the Singapore dollar has touched its highest level since 1998.

http://www.cnbc.com/id/101390521

But To be sure, it isn’t clear the Sing’s climb is sustainable or would withstand a more extended market rout.

“When people want to take money off the table, the safe-haven tag may not be helpful,” Song said. “We can’t avoid spillover from contagion in Southeast Asia.”

Now that would have TOC, TRE readers happy, ’cause they can blame it on the govt.

BTW, here’s an interesting article on the flows in and out of Indonesia and the other Fragile Five. http://www.economist.com/blogs/buttonwood/2014/02/emerging-markets. Actually the rupiah has done relatively better than most other emerging markets currencies against the US$. So has the the Thai baht despite the political problems.

But the currencies of  Thailand Indonesia, M’sia  and the Philippines have fared worse against Japan’s yen than they have against the US dollar. This means that Japanese financial ,institutions may slow down their investments in the region: investing here could be like catching a falling knife. So, they’ll likely wait.

 

Baer says Nay to S$ in 2014

In Currencies, Economy on 04/02/2014 at 4:27 am

THE one-way bet on the Singapore dollar which had a pretty good run the previous five years is gone, and with foreign investors staying away, expect private property prices to fall 10 per cent in the next 12 months, said Mark Matthews, Bank Julius Baer head of research Asia.

Singapore, the most expensive city in Asia is fast losing its lustre for many expats, noted Mr Matthews.

It is also the seventh-most expensive city to live in the world, while traditional rival Hong Kong is cheaper at 12th place, and Tokyo is a relative bargain at 19th, according to the website Expatistan. (BT on 31st January 2014)

BTW, Baer means bear. So bear mauls horse? TRE, TOC readers will he happy. A weak S$ leads to higher inflation*, leads to higher interest rates, leads to collapsing property market, leads to PAP defeat will be their reasoning.

Related posts

http://atans1.wordpress.com/2013/12/19/tre-readers-are-illiterate-in-economics-and-finance/

http://atans1.wordpress.com/2014/01/16/why-banks-tested-for-50-plunge-in-property-prices-and-other-wonderful-tales/

Happy Neigh Year as the Disney channel cartoon characters will say.

*Update at 9.00am on 4 February 2014:

I juz came across this report again  http://sbr.com.sg/economy/news/singapore-inflation-moderated-24-in-2013yesterday, while looking for something else. It was trupeted by ST as a triump by the govt- moderating inflation

It reminded me of an interesting observation juz before CNY. At the Outram MRT stn there is shop selling rice dishes like chicken rice. In mid November when I exited the station, it was selling the dishes at $2 (a price I know it has held for several yrs). When I next passed the stall on 29th January, the price was $2.20.

Inflation moderating? What moderating? To misquote the sleeping co-driver.

S’pore’s & other Asean’s currencies undervalued

In Currencies on 25/01/2014 at 4:34 am

All the Asean’s currencies are undervalued in purchase-parity terms vis-a-vis the US$. http://www.economist.com/content/big-mac-index

But the S$ is the least undervalued .i.e. its the strongest Asean currency. So if S’pore raises interest rates as TRE posters are calling, money will flood in from the other currencies.  And property prices will fly and the economy tank as exports will be uncompetitive. http://atans1.wordpress.com/2013/12/19/tre-readers-are-illiterate-in-economics-and-finance/

Why Thai politics is broken: http://www.economist.com/blogs/economist-explains/2014/01/economist-explains-13

Indonesia’s most popular politician in the yr of presidential elections: http://www.economist.com/blogs/banyan/2014/01/indonesias-most-popular-politician

The problems facing the PM of Cambodia (BTW, he admires one Harry Lee): http://www.economist.com/blogs/banyan/2014/01/future-democracy-cambodia

Analysts worried about higher inflation, predict stronger S$

In Currencies, Economy on 16/10/2013 at 4:21 am

Remember ministers jokes on inflation last yr? They told us that we should look on the bright side i.e. inflation excluding COEs as though biz vehicles don’t need COEs. http://atans1.wordpress.com/2012/08/13/inflation-why-the-misleading-picture-minister-media/

Wonder why they don’t crack such jokes this yr? Inflation (excluding COEs) not too looking gd for us and govt

From BT 15th October 2013

Coupled with a tight labour market, the central bank said that core inflation – which excludes costs of accommodation and private road transport – is expected to be 1.5-2 per cent in 2013, and rise to 2-3 per cent in 2014. With upside core inflation risks looming, economists from Nomura, Citi, DBS and UOB say that a tightening of monetary policy in April could be on the cards – particularly if prices rise beyond the government’s comfort zone.

Said Nomura analysts in a report: “Overall, the statement should raise market expectations of the MAS shifting towards an even tighter (foreign exchange) policy stance at the April 2014 meeting.”

Added Citi economist Kit Wei Zheng: “Though not our forecast, with the possibility that core inflation may breach the MAS’s implicit 2-2.5 per cent tolerance threshold in 2014, slope steepening in April 2014 cannot be ruled out, especially if growth uncertainties subside.”

Calling such a scenario “definitely possible”, UOB economist Francis Tan said: “It would have to be fuelled by something completely unanticipated, like if oil prices suddenly spike up due to renewed political tensions in the Middle East. Then the MAS will probably move in to tighten the Singapore dollar NEER.”

http://www.businesstimes.com.sg/premium/top-stories/unabated-inflation-could-tip-mas-tightening-economists-20131015

Ah well S$ will appreciate eve3n more against regional currencies. Gd for S’poreans travelling, not gd for tourists from the region, and for our companies.

Antidote on all the gloom towards Euro

In Currencies on 25/01/2012 at 8:23 am

(Or “Why I keep some small change in Euros”)

http://dealbook.nytimes.com/2012/01/24/fate-of-the-euro-a-contrarian-view/?nl=business&emc=dlbkpma21

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