To reflect the MASSIVE LOSSES by Old Fart & Butch-in-Law?
<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published December 25, 2008
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Softer S$ stance unlikely before April 2009
By LARRY WEE
SENIOR CORRESPONDENT
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>CURRENCY trading slowed to a visible halt for the holiday season yesterday, leaving the US dollar to tread water around key round-number markers such as 90 Japanese yen, S$1.45 and US$1.40 per euro yesterday.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>Indeed, financial markets appeared all but resigned to a poor 2008 close for global stock markets, thus turning the focus towards possible fiscal stimulus packages here and abroad.
In terms of the world's two largest economies, for example, hopes centre on massive 2009 fiscal relief efforts of up to US$1 trillion in size from Japan and the USA.
Locally, likewise, an earlier than usual annual Budget presentation by Prime Minister Lee Hsien Loong on Jan 22, just before the Chinese New Year festivities, is also expected to help cushion the worst effects of any recession in the Republic.
On the monetary side, the closing months of 2008 have thus seen a bit of speculation that the Monetary Authority of Singapore (MAS) may also be inclined to move to a more accommodating stance for the trade-weighted Singapore dollar or S$NEER as soon as next month.
On balance, however, the weight of opinion out there among MAS- watchers appears to be in favour of the current neutral monetary policy stance announced by the MAS at its last policy review in October 2008, at least until their next one in April 2009.
In their latest quarterly forecast DBS researchers, for example, expect fiscal initiatives to bear the brunt of cushioning the local economy from next year's expected recession.
They deem the current S$NEER stance appropriate, with no changes expected even in April next year, because the key problem for the local economy is weak demand and not export competitiveness - a point which is also emphasised by Standard Chartered Bank analysts.
The latter also explain that, in any case, the marginal improvement in export competitiveness which might be expected following a softer Singapore dollar stance is likely to be offset by an almost equal and opposite effect on import prices.
Furthermore, they explain, a weakening Singapore dollar may also dampen investor appetite for assets denominated in the local currency.
As for the pivotal US dollar-Singapore dollar relationship, Stanchart analysts expect it to move back up towards S$1.48 by mid-2009, before resuming its slide thereafter.
'At that time, investors will start to come back to Asia, and the US dollar will begin to fall, in our view. Beyond Q2 2009, we expect the US dollar to enter another multi-year decline against most major currencies, including the Singapore dollar.'
On the other hand, UK-based Barclays Capital suggests that the MAS could re-centre the S$NEER's allowed trading band some 150 basis points lower in April 2009 - effectively reversing the slight uptick announced at their April 2008 review - as inflation at home falls back below trend next year.
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<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published December 25, 2008
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Softer S$ stance unlikely before April 2009
By LARRY WEE
SENIOR CORRESPONDENT
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>CURRENCY trading slowed to a visible halt for the holiday season yesterday, leaving the US dollar to tread water around key round-number markers such as 90 Japanese yen, S$1.45 and US$1.40 per euro yesterday. <TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>Indeed, financial markets appeared all but resigned to a poor 2008 close for global stock markets, thus turning the focus towards possible fiscal stimulus packages here and abroad. In terms of the world's two largest economies, for example, hopes centre on massive 2009 fiscal relief efforts of up to US$1 trillion in size from Japan and the USA.
Locally, likewise, an earlier than usual annual Budget presentation by Prime Minister Lee Hsien Loong on Jan 22, just before the Chinese New Year festivities, is also expected to help cushion the worst effects of any recession in the Republic.
On the monetary side, the closing months of 2008 have thus seen a bit of speculation that the Monetary Authority of Singapore (MAS) may also be inclined to move to a more accommodating stance for the trade-weighted Singapore dollar or S$NEER as soon as next month.
On balance, however, the weight of opinion out there among MAS- watchers appears to be in favour of the current neutral monetary policy stance announced by the MAS at its last policy review in October 2008, at least until their next one in April 2009.
In their latest quarterly forecast DBS researchers, for example, expect fiscal initiatives to bear the brunt of cushioning the local economy from next year's expected recession.
They deem the current S$NEER stance appropriate, with no changes expected even in April next year, because the key problem for the local economy is weak demand and not export competitiveness - a point which is also emphasised by Standard Chartered Bank analysts.
The latter also explain that, in any case, the marginal improvement in export competitiveness which might be expected following a softer Singapore dollar stance is likely to be offset by an almost equal and opposite effect on import prices.
Furthermore, they explain, a weakening Singapore dollar may also dampen investor appetite for assets denominated in the local currency.
As for the pivotal US dollar-Singapore dollar relationship, Stanchart analysts expect it to move back up towards S$1.48 by mid-2009, before resuming its slide thereafter.
'At that time, investors will start to come back to Asia, and the US dollar will begin to fall, in our view. Beyond Q2 2009, we expect the US dollar to enter another multi-year decline against most major currencies, including the Singapore dollar.'
On the other hand, UK-based Barclays Capital suggests that the MAS could re-centre the S$NEER's allowed trading band some 150 basis points lower in April 2009 - effectively reversing the slight uptick announced at their April 2008 review - as inflation at home falls back below trend next year.
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