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.
Hong Kong stocks opened flat Wednesday as investors took a breather after four days of gains while a surprisingly weak reading on the US services sector further doused expectations for an interest rate hike.
The Hang Seng Index edged up 10.07 points to 23,797.75.
The benchmark Shanghai Composite Index was also barely moved, ticking up 0.62 points to 3,091.33, while the Shenzhen Composite Index, which tracks stocks on China’s second exchange, inched down 0.01 points to 2,048.18.
MALAYSIA share prices opened lower on Wednesday with the FTSE Bursa Malaysia Kuala Lumpur Composite Index down 9.420 points to 1,680.350.
Volume was 40.024 million lots worth RM39.73 million.
Gainers outnumbered losers 92 to 70.
SINGAPORE stocks opened 0.41 per cent higher on Wednesday, with the Straits Times Index adding 11.74 points to 2,908.29 as at 9.01am.
Nasdaq hit a fresh record, jumping 0.5 per cent to 5,275.91 points on Tuesday, up about 14 points from the last record set on Aug 15.The Dow Jones Industrial Average added 0.3 per cent to 18,538.12, while the broad-based S&P 500 rose 0.3 per cent to 2,186.48. Lacklustre US economic data reportedly boosted confidence that the Federal Reserve will continue to keep interest rates low.
In Singapore, about 73.7 million shares worth S$56.1 million in total changed hands. Gainers beat losers 80 to 35.
Top stocks by value traded were DBS, SGX and Singtel.
Australian shares edged lower on Tuesday, led by losses in the financial sector as markets were largely resigned to the prospect of the Reserve Bank of Australia keeping rates steady at its policy meeting later in the day.
The S&P/ASX 200 index was down 20.68 points, or 0.4 per cent, at 5408.8 by 0240 GMT, pulling back slightly from a 1.1 per cent gain on Monday.
“The market is marking time to see the results from the Reserve Bank,” said James McGlew, executive director of corporate stockbroking at Argonaut.
“The chance of another rate cut is very slim indeed. I think the markets would be very surprised if there is a rate cut today.”
Asian shares edged up on Tuesday as investors awaited the Reserve Bank of Australia’s policy meeting in which it is expected to keep interest rates steady.
European stocks touched an eight-month high on Monday, then reversed as trading wound down in the absence of US markets, which were closed for Labor Day.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3 per cent.
Australian shares slipped 0.3 per cent ahead of the RBA’s announcement at 0430 GMT.
Taiwan stocks rose on Tuesday tracking gains in some overseas markets and supported by foreign investors buying shares.
As of 0158 GMT, the main Taiex index rose 0.6 per cent to 9,144.96, after closing up 1.1 in the previous session.
The electronics subindex rose 0.9 per cent, while the financials subindex gained 0.2 per cent.
Tech component makers were among actively traded stocks. Optical storage device maker Ritek was up 2.1 per cent, while printed circuit board maker Compeq was 3.5 per cent higher.
Foreign investors have net purchased local shares so far in September, adding to their net buying for the past three months in a row.
The purchases have strengthened the Taiwan dollar to levels not seen since mid-August.
The Taiwan dollar firmed NT$0.092 to NT$31.414 per US dollar.