encik wan - Trading Developer on Global Investment and Technical Analysis

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.

USDSGD 2000-2011

USDSGD 2008-2011

It is time for almost annual currency analysis of US Dollar, Singapore Dollar and Malaysia Ringgit. You can find past analysis of USD, SGD and MYR for 2010, 2009 and 2008.

USDSGD Rate
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Long term support of 1.4 is broken decisively in early 2010. In the short term USDSGD may revert to current resistance at 1.30 (lower bound of short term down channel) before heading for 1.2 and beyond. What could be catalyst of USD rebound? End of QE2? . If that happens, what happen to equity market and commodities without cheap money?

USDMYR Rate

Long term chart pattern of USDSGD and USDMYR is similar : weakening of USD. However in the short term USDMYR may revert to 3.05 from 3.0128 (April 22 2011) due to divergence in USDMYR trend(down) and RSI(up). See chart below.

SGDMYR Rate

For the long term, SGDMYR is on the way to test multi-decade high of 2.5. In short term SGDMYR is also in bull mode. It breaches previous resistance at 2.40 and 2.42 in 2011. It may go up as high as 2.46 within 2011 since it is still not overbought (RSI) at 2.4357. See 2011 SGDMYR chart below.

Thanks to The Monetary Authority of Singapore policy to use stronger Sing Dollar to fight inflation, I think we can assume SGDMYR may reach 2.5 within the next few years as long as there is no currency competitive devaluation.

In the last decade, top for US Dollar Index is 120. However in the last few years, US Dollar Index fails to break 90 in 2005, 2009 and 2010. See US Dollar Index chart below.