Singapore Dollar Fell after the Deflation Report



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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