The Monetary Authority of Singapore (MAS) have their 6-monthly policy meeting next week. The thing about the MAS is that they use an exchange rate mechanism rather than interest rate policy, to manage their monetary system. They have been intervening very heavily this week to keep the USD/SGD rate steady above 1.2600 before their meeting starts.
The follow-on effects of this is that their neighbours in countries like Malaysia don’t want their currency strengthening against the SGD and so they are forced to intervene as well.
The number are large, possibly over USD10 billion in total already this week, and 50% of this is recycled into EUR, AUD etc. No wonder the EUR/USD has trouble falling despite really bearish news.
