Singapore dollar forwards drop as traders see MAS policy on hold


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The currency market has shifted to signal expectations the Monetary Authority of Singapore will refrain from easing next month, with a measure of the local dollar’s potential direction sliding to a four-year low.

Six-month forwards stumbled to minus 15.64 points on Thursday, the least since July 2012, data compiled by Bloomberg show. The rate touched 32.23 points on June 28, days after the UK vote to exit the European Union caused a global financial rout.

Futures contracts show the likelihood for the US Federal Reserve to raise interest rates at the Sept 20-21 meeting has gone down to 22 per cent after recent disappointing US economic data.

“The market is not looking at Singapore dollar depreciation at this point because of what’s happening in the US,” said Irene Cheung, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd in Singapore.

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