Singapore and Hong Kong Dollar's Gain against Greenback, But Post Olympic Concerns Lo

[B]Talking points

• Singapore Dollar Falls Below 1.4100
• More MAS Intervention Intervened
• Hong Kong Dollar Rally Stalls On Post Olympic Concerns [/B]

The Singapore dollar built off of yesterday’s momentum on the back of broad based dollar weakness, and suspected buying from the MAS. The pair found resistance at 1.4200 which led to it falling below the 1.4100 handle for the first time in five days. Price action has since consolidated around said price level as dollar bulls have yet to give up the fight.

The USDHKD found support briefly during Asian trading as it fell as low as 7.8078. The dour outlook for the region’s economy has erased earlier gains. Concerns are growing that a post Olympic downturn in China is looming which will weigh further on the city’s economy as its ports are dependent on Chinese exports.

An empty economic calendar on both sides will leave price action to risks winds and broader macro factors. The growing concerns over the financial sector built on the U.S. GSE’s possible bailout may continue to weigh on dollar sentiment. Yet, the rapidly declining outlook for the Asian economy will remain as a supportive factor. Also look for the MAS to continue to employ actions that support the Singapore dollar as their inflation concerns remain.

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