Singapore Dollar May Rise on MAS, Emerging Markets Still at Risk

ASEAN Weekly Outlook – MAS, Singapore Dollar, US Dollar, Emerging Markets

  • ASEAN FX succumbed to USD gains as emerging markets fretted tightening global credit
  • Singapore Dollar may rise on MAS as the monetary authority takes more aggressive path
  • Developing nations still at risk as they eye IMF outlook, trade wars and rising US Dollar

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Last week seemed like a reckoning in the markets as the global economy continues to watch tightening credit conditions. Spurred after the Fed raised interest rates for a third time this year, US government bond yields touched multiyear highs, further pressuring emerging markets with large current account deficits. The MSCI Emerging Markets ETF experienced its most aggressive drop in months as the US Dollar soared.

Not surprisingly, the greenback experienced broad gains against ASEAN currencies. The most underperforming were the Indonesian Rupiah and Singapore Dollar on the table below. For the former, headline inflation cooled to 2.88% y/y in September from 3.20% prior.

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