FX Pulse

OVERNIGHT

    The U.S. dollar was broadly lower against all of G10 peers except GBP despite U.S’s 3Q GDP revised higher to 2.1% from 1.5% while consumer confidence fell to the lowest level since Sept 2014. The dollar index DXY settled at 99.61, 0.14% lower from Mon’s close.

    GBP traded lower by 0.26% to 1.5084, the only currency in G10 to fall against the greenback after BOE’s Carney told lawmakers that UK rates are likely to remain low for some time while BOE’s chief economist Haldane warned of downside risk to inflation and GDP. EUR continued to find interest to sell on rallies, this time at 1.0670, to constrain the pair within 1.0620/65. AUD kept strong gains of 0.90% to 0.7257 after RBA’s Stevens said markets should “chill out” for the festive season and only reassess economic data in Feb, effectively rendering the RBA meeting next Tues a non-event. Meanwhile, iron ore printed yet another YTD low overnight. NZD rallied at NY mid-day to finish half percent higher at 0.6555. USD/JPY was still well supported at 122.30 overnight as Turkey’s downing of a Russian military jet did not escalate.

    Regional currencies MYR (+1.26%), SGD (+0.48%), THB (+0.24%) and IDR (+0.11%) all ended higher against the greenback. The MYR led gainers within Asia, to 4.2425/USD as a strong rebound in oil prices boosted sentiment further for

    the oil-producing nation, together with the sale of power assets of 1MDB to China General Nuclear Power Corp.

    Portfolio wise, we are mixed on the dollar, long USD vs CNH GBP and EUR (via options) while short USD vs AUD and SGD (added today).

    TODAY’S VIEWSingapore’s economy averted a technical recession in the third quarter after 3Q GDP rose 1.9% q/q, exceeding expectations of no growth and 2Q’s decline of 2.6%.

    The SGD strengthened as much as 0.3% to 1.4060 following the data release, taking out the 50-day MA support at 1.4091 for the first time since 6-Nov (U.S payrolls day) and the current pull-back could extend all the way towards the key mid-term level which is currently at 1.3905 (rising trend-line support). As such we turn bearish USD/SGD at 1.4070 with target 1.3905 and stop 1.4160.

    Separately, we also took partial profit for AUD/SGD at 1.0250 this morning as overbought conditions reduce the odds for a further up-move to next target at 1.0315.

    Lastly, the next issue of FX Pulse will resume only on 9-Dec.