Hong Kong And China
The Hong
Kong dollar was strengthened on the day, following in line with the
Chinese yuan after the weekend’s G7 meeting. Although no real pertinent statements
were made to spur the yuan in the overnight, traders continued to press the
currency higher on a consistent theme by global finance ministers. Stating that global imbalances are
narrowing, finance ministers and central bankers agreed that further flexibility
must be instituted in the Chinese yuan. The notion continues to support of hopes
that a regime adjustment is in store for the short term. Incidentally, the sentiment sparked
unconfirmed rumors swirling around desks that Chinese policy officials may be
considering a revaluation in the very near term. Nonetheless, with global leaders still
putting the pressure on Chinese officials, traders continue to push the
underlying currency lower throughout the New York session. Now currently trading at 7.7289, the
Chinese yuan is slightly weaker than Friday’s close at
7.7260.
Comparatively, the Hong Kong dollar
was higher, but not that much higher, in the New York session. Currently trading at 7.8128, the
underlying currency is being supported by notions that a stronger yuan will be
beneficial for the competitiveness of Hong Kong
based exports. The sentiment is
being combined with a stronger equity market, which is helping to keep the HKD
below last week’s resistance at 7.8150.
Benchmark stocks rose to a seven week high following major advancement in
shares of China Mobile Ltd. The
stock was supported widely by comments, according to UBS reports, that Chief
Executive Wang Jianzhou remains “confident” in near term growth prospects of the
company. As a result, the world’s
largest cell phone operator (by subscribers) vaulted HK$4.05 to HK$75.20 during
the overnight session. The market’s
optimism was also fed by advancement in China Petroleum shares. Stock in Asia’s biggest oil refiner was boosted during market hours
as the company stated first half profit increases of more than 50 percent Higher fuel and chemical sales are
likely to support higher figures.
As a result, shares of Sinopec climbed 7 cents to
HK$7.17.
Strength Left For
HKD
Consolidating at the 7.8120 figure,
the underlying Hong Kong dollar is looking
privy to further strength in the Asian session.
Momentum indicators are helping to keep the selling pressure
maintained, with targets likely to emerge at the 7.8105 on a break of the current
7.8120 support. Comparative upside
potential looks thin given the massive line of barriers at the 7.8135 (20/50/100 hMA
confluence) figure. The notion is
supportive of further selling ahead of any upside rallies.
Singapore Dollar
The Singapore dollar also gained on the day supported
by stock market gains, in similar fashion to markets in Hong Kong and China. However, intraday strength remains mild
ahead of tomorrow’s export figures, both which are expected to show upticks in
both sectors. Should the report
show a reversal of previous weakness in manufacturing, namely the electronics
sector, further support will be garnered as it shows a way out of the recent
soft patch. Additionally boosting
the underlying currency were gains in the regional benchmark index. The Straits Times index added 40.56
points to close at 3,414.15, higher by 1.2 percent. Leading gains on the day were developer
stocks and oil related stocks following a deal involving the world’s largest rig
builder. Climbing 70 cents to
S$20.70, shares of Keppel Corp. closed higher by 3.5 percent after the company
announced it had won a $305 million order for an oil exploration vessel. The deal boosted stocks already higher
on speculated oil demand, namely Technics Oil and Gas Ltd., which shares
advanced by a whopping 17 percent to S$1.12. The company stated future orders of S$8.3
million coming in from various Asian shipyards. Subsequently, developers helped to boost
optimism on the day. CapitaLand
shares, the largest property developer in the region, gained 40 cents to S$8.55
after it was revealed that private housing prices had their biggest quarterly
gain following the longest economic expansion in the country in six years. The notion has allowed developers to
create luxury properties fetching record prices.
Neutral Bias For USDSGD
Continues
In similar fashion, resistance is
countering momentum indicators, keeping the underlying spot
suggestions referring to a range bound scenario. Upside barriers are being protected by the 1.5175
(50/100 hMA) resistance, with the 1.5184 session high capping any near term
gains. Bottomside barriers reside
at the 1.5141 session low before the 1.5106 (April 10th hourly low)
will come into play.
