SGD: Modest Depreciation In 2009

The Singapore dollar looks poised for further strength over the near term even though the central bank re-centered the currency band at its latest policy meeting in April to allow more room for depreciation. The unit - currently trading at SGD1.5015/US$ - has strengthened 3.5% since the beginning of March when global equities began to rally and the unit is currently approaching 10-month trendline resistance at around SGD1.4900/US$. We expect the level to hold. However, should the level be breached, the Sing dollar may strengthen as far as SGD1.4200/US$.

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