26 Jul 2013
Flash: SGD viewed as expensive – Westpac
FXstreet.com (New York) - “On SGD, we view the currency as expensive on a number of fronts.” notes Jonathan Cavenagh at Westpac.
Key quotes
“Inflation pressures continue to ease on both a headline and core basis. Indeed this week the MAS lowered its forecast for 2013 inflation to 2-3% from 3-4% previously.”
“GDP growth is still expected to be in a 1-3% range and while the recent Q2 GDP print surprised on the upside, it seems unlikely that we will see strong demand side inflation pressures emerge through the second half of this year.”
Moreover, “Export growth remains quite weak, particularly in terms of electronic exports, which fell -12.4% in year on year terms for June. However, with our SGD NEER estimate still around +0.6% above the mid point of the MAS band, we see scope for SGD to under perform in the period ahead – our bias against the USD is down.”
Key quotes
“Inflation pressures continue to ease on both a headline and core basis. Indeed this week the MAS lowered its forecast for 2013 inflation to 2-3% from 3-4% previously.”
“GDP growth is still expected to be in a 1-3% range and while the recent Q2 GDP print surprised on the upside, it seems unlikely that we will see strong demand side inflation pressures emerge through the second half of this year.”
Moreover, “Export growth remains quite weak, particularly in terms of electronic exports, which fell -12.4% in year on year terms for June. However, with our SGD NEER estimate still around +0.6% above the mid point of the MAS band, we see scope for SGD to under perform in the period ahead – our bias against the USD is down.”