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Fundamentals and Technicals Prime for a Bull Market in the Singapore Dollar

BySimit Patel
Published 02/18/2012, 03:24 PM
Updated 07/09/2023, 06:31 AM
USD/SGD
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SGXL
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I really like this technical setup -- I think there are some great risk/reward plays here. 

USDSGD daily chart

Martin Armstrong recently published a short essay on Singapore, in which he argues that Singapore is implementing regulations designed to prevent the onset of another MF Global -- and that this step will help Singapore attract capital and become a major financial hub. Here's an excerpt from the essay:

Interesting, where the corruption in the United States prevents the Regulators (SEC & CFTC) from actually protecting investors, Singapore is doing what the US will NEVER do. The Monetary Authority of Singapore (MAS) is aiming to revamp the way derivatives contracts are traded to reduce the risk of a MF Global/Lehman Brothers-style disaster over there where the US Regulators will NEVER do the job. The most important change will mean any trades in these complex derivative products will be cleared at a central institution such as the Singapore Exchange (SGX). This will wipe out the US market and the only safe place will be Singapore. This seems to be falling perfectly in line with our computer model that shows the Financial Capital of the World is shifting to Asia. 

Singapore has become the most important derivatives market within Asia. The market there has displaced the US and Japan and has reached about US$9.8 trillion (Singapore $12.3 trillion) a year. This is an incredible market that has been dominated by foreign exchange, oil and debt markets. About US$700 trillion of such contracts are traded globally on an annual basis. With Singapore actually regulating instead of being bought and paid for, it may become the new Financial Rome/Mecca.

I agree with this outlook and think an influx of capital could go rushing into Singapore.

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