Singapore Dollar (SGD) as a Carry Trade Currency


Singapore Dollar (SGD) as a Carry Trade Currency


Dear Corporate Treasurers , Bankers , Traders,

Hope you are doing great and enjoying !!


Well today we are going on Forecast of Singapore Dollar. Well Singapore is still facing low side GDP Growth however at the same time we should not forget that Singapore is acting as GFC (Global Financial Centre ) and RTC ( Regional Treasury Centre ) for the world. Services is growing in Singapore and the same would continue to happen as Singapore is acting as both GFC and RTC.

While on the other side we need to appreciate the fact that manufacturing is very less in Singapore and going down... well credit for the same would surely go to downfall in Chinese Markets however Singapore is always known to follow unique model henceforth we expect Singapore to comeback soon.

As regards valuation of Singapore Dollar is concerned then it s trading at 1.4965/1.4075 which effect effectively means as an exporter you would get 1.4065 SGD when you would be selling your $ and you have to pay 1.4075 SGD to get one $ on spot which is T+2 Days.

As regards volatility is concerned then then Month till Date (MTD) Singapore Dollar faced volatility of -1.22% vs. 6 Months Volatility of 1.65% which is not very high vs. other G7 Currencies. At the same time we need to understand the fact that sooner or later Singapore is coming up as a Carry Trade Centre as MAS which is acting as a Central Bank of MAS decides to raise the rate to 2.4% by 2017 which effectively would put Singapore Dollar as a Carry Trade.

As regards Currency forecast is concerned then Singapore Dollar would expect to trade at 1.54 levels as well which effectively means valuation of Singapore Dollar would be in sink with the $ Strength. If $ would gain strength so would be Singapore Dollar and if not then Singapore Dollar would come down to say 1.33 levels. At the same time all Traders sitting at Offshore Treasury Markets from London till Sydney need to understand that sooner or later Singapore Dollar would act amongst World Carry Trade Currencies.

Best,

Rahul

Corporate Treasurer , EXL Service Holdings, Inc. ( NASDAQ Listed )
Founder of the Brand , " Foreign Exchange Maverick Thinkers "

91-9899242978 , Skype Connect ~ Rahul5327 , Twitter @ Rahulmagan8

 

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