Chinese Reserve Agency To Be Established 'Soon', According To Zhou

[DailyFx]

- Chinese Reserve Agency To Be Established "Soon", According To Zhou

- FX Reserves Rise In Both Hong Kong And Singapore

- Singapore Stocks Decline From Record Close

- Hang Seng Index Benchmark Rises Above 21,000






- Chinese Reserve Agency To Be Established "Soon", According To Zhou
According to People?s Bank of China Governor Zhou Xiaochuan, China will "soon" have its own private investment branch to diversify the $1.2 trillion in foreign exchange reserves. Speaking in Basel, Switzerland at the Bank for International Settlements, Zhou stated that he thinks "it will be officially set up" in the near term allowing for greater returns from excess cash that the government is holding. Subsequently, the new fund will have greater "flexibility" in investment decisions and allocation in order to make the proper returns. Incidentally, the news comes as no surprise with officials already releasing early intentions at the beginning of the year, leaving today?s comments as simple confirmation. The Chinese yuan traded to a record high against the dollar, as a result, priced as low as 7.7049 against the US dollar in the overnight and New York sessions.

- FX Reserves Rise In Both Hong Kong And Singapore
Central banks from both the Hong Kong and Singapore economies exploited a slightly stronger currency in order to purchase more US dollars in the month of April. According to recent government reports, Hong Kong added to reserves bringing the final number to $136.8 billion, up from the $135.4 billion at the end of March. Singapore?s reserves grew by almost 2 percent, rising to $140.05 billion from $137.48 billion in the prior month.

- Singapore Stocks Decline From Record Close
Falling from a record, the Straits Times index declined from a record setting session last week. Bucking a three session streak, the benchmark index declined by 8.17 points or 0.2 percent to close at 3,477.59 in the overnight. Incidentally, the closing figure is a far cry from the start of the session, as benchmark issues raced ahead by as much as 1.1 percent. Leading the overall market lower were shares in United Overseas Bank and City Developments. Both companies had seen considerable advances, setting the stocks up for pullbacks on profit taking. Notably, although the stock has advanced by as much as 18 percent on the year, United Overseas shares dipped 20 cents to $22.90. DBS Group Holdings, however, continued higher after receiving a share price estimate upgrade from Credit Suisse Group. Shares of Singapore?s biggest bank climbed 70 cents to S$23.50.

- Hang Seng Index Benchmark Rises Above 21,000
Comparably, Hong Kong shares closed at a record on the day, briefly breaking above the 21,000 figure before retracing in the overnight Asian session. Supportive of the advance was interest in Hang Lung Properties Ltd. The company help to boost overall bid sentiment towards developer stocks on expectations that a government land aution tomorrow will attract higher bids. As a result, the region?s fourth largest developer by market value gained 3.3 percent to close at HK$24.80. Sun Hung Kai Properties added 0.1 percent to HK$96.35, on similar sentiment. As a result, the Hang Seng made a move higher, adding 55.56 points to close at 20,896.64, a far cry from the record high of the session at 21,070.21.

Technically Speaking

Hong Kong Dollar Weakens Off Of 7.8150
Bouncing off of support in the short term, the USDHKD pair is running into short term resistance at the 7.8200 (50 hMA) psychological figure after the overnight?s advance. With momentum indicators already running into overextended territory, the bounce looks dead-catish and sets up the price action for a rebound back to the 7.8150 support. Should the bid momentum carry through the current ceiling, capping is likely at the 7.8210 (200 hMA).

Singapore Dollar Moves Higher, Tests 1.5150
Breaking through the 1.5160 support over the weekend, the USDSGD currency pair is set for a mild retracement on profit taking in the Asian session. Although selling momentum still visibly reigns, probably is on the side of the offers. Resistance is looking heavy uptop at previous support, the 1.5160 (50 hMA) resistance figure. Should the pair break through on dollar momentum, capping is likely at the 1.5200 (200 hMA) psychological figure. Momentum indicators are both on the side of an advance, with stochastic forming a notable golden cross.