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.
Asian stocks fell as investors weighed the outlook for monetary policy in the US and Japan after the European Central Bank downplayed the need for more economic stimulus. South Korean shares dropped amid concern North Korea may have conducted a nuclear test.
The MSCI Asia Pacific Index dropped 0.7 per cent to 141.03 as of 10:49am in Tokyo. The measure is heading for a 2.1 per cent advance this week as traders pared bets the Federal Reserve will raise rates at its September meeting while speculation swirled over whether the Bank of Japan will add to already record stimulus.
Shares in the US and Europe fell after ECB chief Mario Draghi played down the prospect of an increase in asset purchases at a time when concern over the impact of Brexit on the euro area is mounting.
“While the ECB disappointed, we could still expect additional stimulus later in the year as there’s so much uncertainty in Europe,” James Woods, a strategist at Rivkin Securities in Sydney, said by phone.
South Korean shares and won fell early on Friday following a suspected North Korean nuclear test.
South Korea’s presidential Blue House will hold a National Security Council meeting at 0200 GMT on Friday after seismic activity was detected near North Korea’s known nuclear test site, activity South Korea said could have been a nuclear test.
The Korea Composite Stock Price Index (Kospi) was down 1.2 per cent at 2,038.21 points as of 0201 GMT.
The won was quoted at 1,100sw.1, down 0.7 per cent compared to Thursday’s close of 1,092.6.
Hong Kong stocks rose in early trade, adding to the previous day’s rally on upbeat Chinese trade data, while investors await the release of mainland inflation figures.
The Hang Seng Index added 0.20 per cent, or 46.68 points, to 23,966.02.
But the benchmark Shanghai Composite Index was marginally lower, edging down 0.52 points to 3,095.43, while the Shenzhen Composite Index, which tracks stocks on China’s second exchange, was slightly up, ticking 0.51 points higher to 2,050.59.
MALAYSIA share prices opened lower on Friday with the FTSE Bursa Malaysia Kuala Lumpur Composite Index down 0.260 points to 1,691.120.
Volume was 21.500 million lots worth RM4.936 million.
Gainers outnumbered losers 65 to 57.
SINGAPORE stocks opened 0.82 per cent lower on Friday, with the Straits Times Index losing 23.78 points to 2,870.7 as at 9.05am.
About 105.1 million shares worth S$74.8 million in total changed hands. Losers outnumbered gainers 88 to 63.
Some of the top traded stocks were Singapore Exchange, CapitaLand and Singtel.
THE following stocks made announcements after Thursday’s market close that could affect its trading on Friday:
Yoma Strategic said its subsidiary, Convenience Prosperity Company Ltd (CPCL), has been appointed by J C Bamford Excavators as the exclusive distributor for the Myanmar market. The partnership is important at a time when infrastructure and construction activities are accelerating across the country, said its CEO Melvyn Pun.
Seafood supply chain manager Oceanus Group has signed a binding term sheet with two of three of its key creditors for a proposed debt restructuring, which may greatly reduce its total outstanding debt balance. The total debt balance, including accrued interest, held under the two key creditors, Ocean Wonder International and BW Investment, amounts to S$71.85 million, representing 82.8 per cent of Oceanus’s outstanding debts.
Del Monte Pacific narrowed its first quarter loss to US$8.7 million, from US$10.7 million a year ago, on lower operating expenses as a result of a restructuring that started last year. The group’s revenue shrank 2.8 per cent to US$465.5 million from the preceding year.