Hong Kong And China
Both the Hong
Kong dollar and Chinese yuan were relatively unchanged during the
session, with little left to trade on ahead of the weekend. However, political pressure continued to
keep the underlying bid tone in the Chinese yuan as statements emerged from
Senator Lindsey Graham. Senator
Graham, who led the now defunct Graham-Schumer bill placing a 27.5 percent
tariff on all Chinese imported goods, is now seemingly working on another piece
of legislation that may support rising protectionist sentiment. The South Carolina Republican stated
plans to work with members of the Senate Finance Committee in developing a new
legislative package that would confirm with current WTO rules. Notably, Graham was quoted as having
intentions to create “pain” for Chinese officials, punishment for “when they
cheat”. The news will likely help
the market to open higher on Monday as it correlates with recent more subtle
suggestions of flexibility by US Treasury Secretary Henry Paulson on Wednesday.
Separately, the Hong Kong market was little changed ahead of the close as
the Hang Seng Index added a mere 4 points to close at 19,179.61. Traders took a break during the session
following a wild rollercoaster of a ride over the past six sessions. Notably, Bank of China shares added 4
cents or 1.1 percent to close at HK$3.79 as the nation’s biggest insurer, China
Life, climbed 20 cents to HK$21.60.
USDHKD Finally Makes A Move
Kong dollar declined on a failure to break above
the 7.8180 resistance figure, dipping to as low as 7.8118 in New York. Now, consolidating, the currency pair is
looking lighter, and set for a mild pullback on profit taking. Momentum indicators are confirming the notion, however,
suggesting slightly more downside before bids take over. As a result, buyers are looking heavy at
the 7.8116 March 6th spike low with downside caps at the 7.8106 50%
fib from the 7.8022-7.8191 advance.
Should the aforementioned be broken, sellers will likely control the pace
till 7.8058 78.6% fib.
Little was left for Singapore dollar traders as well.
The benchmark was higher for the
week, gaining after the tumultuous debacle over the past week. Real estate developer and commodity
manufacturers led gains throughout the week as investors saw new opportunity
after shares pulled back to cheaper prices. On the day, the index continued the
sentiment, rising 21.22 points to close at 3,143.71 in the overnight. Keppel Corp., the world’s largest rig
builder, led gains on the day advancing as much as 1.2 percent at S$8.55. The day’s advance adds to the already
established 6.9 percent over the past three sessions. The broader market increases kept the
Singapore dollar higher against the
US dollar counterpart, still hovering at nine-year highs. Traders will now be looking to next
week’s schedule, promising a lot more action than what has been witnessed
recently. A handful of important
reports are expected including retail sales figures and exporting numbers. Although retail sales are expected to
remain supported, consensus is pitting a 4 percent advance, exports are
estimated to remain in the doldrums. Notably, the electronics component will
be scrutinized as the sole figure is responsible for the lag in overall exports.
As a result, lower than expected
figures may place some weight on the Singapore dollar, helping the USDSGD
to bounce back on technical support.
Further Downside For USDSGD
Bouncing off of the 1.5250 in the
session, the USDSGD upside is
looking limited. Momentum
seemingly overextended, increasing the likelihood that offers surround the
1.5300 figure. A breach of the level,
however, would purport a move higher until the test at 1.5322 March
5th spike high. Downside
still remains on a trap door decline through 1.5250, with support non-existent
until the 1.5100.