Singapore Dollar Gains On Greenback Weakness, Hong Kong Unemployment Falls To Decade Low

Source: Daily FX

The Singapore dollars strengthen against the dollar after hitting resistance at 1.4195, as the dollar weakened on higher oil and gold prices. The USDHKD would fall to as low as 1.4103 before finding support and consolidating at the 1.4130 price level. Expectations are growing that the MAs will intervene to slow the pace of the local dollar’s appreciation at their October meeting, as the country’s exports continue to slow. This policy action would be contrary to the recommendation of the IMF to allow further appreciation in order to battle rising inflation.

The USDHKD spent the overnight session stuck at 7.8140 as dollar weakness and a lower Hang Seng index offset each other. Meanwhile, unemployment in the country fell to a decade low of 3.2% despite the slowest growth in five months. The strong labor market has supported consumer consumption which beat expectations of 11.0% in June with a print of 11.6%. However, declining exports has slowed growth and may eventually lead to the employment deteriorating.

The economic calendar isn’t providing any event risk for the pair which will leave price action to the broader macro themes of oil and commodity prices. If oil continues to firm the ensuing dollar weakness may see both pairs trade lower throughout the day.