USDSGD at Parity?
Conclusion : If there is no global recession, there is a chance USDSGD will be around 1.00 by 2015
Main reason to be bullish on USDSGD is possibility of global recession. Appreciation of USDSGD is demonstrated in 1997 and 2008. So far for 2011, it seems the same playbook is being used.
Reason to be bearish on USDSGD is US debt monetization. As long as depreciation of USD is orderly and there is no severe recession in Singapore, then Monetary Authority of Singapore is likely to keep the current 2011 monetary policy to use strong SGD to control inflation. Since US debt monetization is least painful for everyone comparing to US fiscal austerity, therefore it is more likely to see USDSGD at parity in the long run.
P.S In the short term, USDSGD may bounce back to 1.275 before end of 2011.
Me !
Leave a comment