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Singapore Dollar Fell after the Deflation Report

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Singapore dollar traded with negative bias

The Singapore dollar fell compared to the US dollar on November 23, 2015. Inflation reports showed deflationary pressures increasing in the economy. Non-oil exports also fell last week. They fell 0.5% on a YoY (year-over-year) basis. The Singapore dollar reached a one and a half month low against the US dollar last week. The US dollar-Singapore dollar pair rose past the level of 1.425. Going forward, the GDP (gross domestic product) growth rate will likely release at a slower pace of 1.4% in the third quarter on an annual basis compared to 2% annual growth last quarter.

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Inflation eases in October

For October, consumer inflation fell by 0.8% on a YoY basis compared to deflation of 0.6% in the previous month. It was below the expectations of a 0.5% contraction. On a month-over-month basis, consumer prices were moving in the negative trajectory by 0.4% in October against flat movement in September. A faster fall in the housing and utilities segment offset steady food prices and a slower fall across the transport segment.

Impact on the market

The iShares MSCI Singapore ETF (EWS) was trading lower on November 23, 2015, by 1.30%. On a similar note, the SPDR S&P Emerging Asia Pacific ETF (GMF) ended the day lower by 0.46%.

Looking at Chinese ADRs (American depositary receipts) in the manufacturing sector trading on US exchanges, the Aluminum Corporation of China (ACH) was trading negatively by 1.5%. On the other hand, Sinopec Shanghai Petrochemical (SHI) fell by 1.3%. Yanzhou Coal Mining (YZC) was trading in the negative trajectory by 1.6%.

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