THE CHARTIST: SGD TO FURTHER APPRECIATE
The Singaporean dollar has consistently appreciated since the beginning of the year, strengthening at approximately 7%. Analysts at BMI Research said the SGD is set to continue strengthening with an average of around SGD1.38/USD in 2017 and SGD1.34/USD in 2018. Strength in the Chinese yen resulted to the SGD’S past appreciation, but going forward, positive growth inflation dynamics in the US will be the primary factor together with an undervalued exchange rate and strong external position. However, analysts expect the currency to drag slightly as the Monetary Authority of Singapore (MAS) endeavours to keep the city’s exports competitive. In the short term, the drag in appreciation is likely to be caused by an overbought currency and the SGD trading at the lower currency band of MAS.