By Greg Holden
A climb in Asian currencies appears to be led by the soaring Singapore dollar (SGD), which reached a record last Friday, alongside a 13-year peak by the Malaysian ringgit, as many expect regional central banks to continue hiking rates to battle inflation, according to Bloomberg.
The Bank of Thailand joined this trend last Wednesday with its sixth rate hike this year and expectations for further such tightening in the near future. The Bloomberg-JPMorgan Asia Dollar Index rose to its highest point since 1997 as investors bought far more stocks than they sold in the Asian economies of Thailand, India, South Korea and Taiwan.
The Singapore dollar appears to have lost some steam as of this morning, but peaked last Friday at 1.2317 against the greenback, its highest mark since at least 1981. Many analysts are forecasting a continuation to the SGD’s surge as the region makes continued gains from a recent boom in consumer confidence towards companies with large bases in the region.
Alongside the SGD’s ascent are the concurrent rises in Asian currencies such as China’s yuan, Malaysia’s ringgit, Thailand’s baht, and the South Korean won. All of the aforementioned are in bullish channels against their Western counterparts with expectations for further monetary policy tightening in the months ahead which will no doubt fuel this rapid climb. Look to go long on Asia in the weeks ahead.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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