SGD HKD Trading

Introduction to the SGD/HKD Forex Pair

For this currency pairing, the core currency is the SGD (Singapore dollar), the currency counter is the HKD (Hong Kong dollar). The SGD to HKD chart is the currency pair of the Singapore dollar to the Hong Kong dollar. When measured against the HKD, it reflects how much the SGD is worth. The SGD/HKD is called an unusual pair of currencies and so traders have traditionally used the Singapore dollar as a refuge for trading.

About the SGD

Singapore became a sovereign country in 1965 recognized as the Republic of Singapore. The country set up the Board of Currency Commissars which introduced the Singapore dollar. The first series of banknotes was issued in 1967. Such notes were known as ‘Orchid’ notes and until 1973 were exchangeable at par with the Malaysian dollar. The currency was originally set at a rate of 60 SGD to 7 GBP. The currency indexed back to the US dollar and then to a weighted currency basket. The Singapore dollar embraced a market-oriented policy in 1985 and was allowed to float, though closely watched. In 2002, the BCC was dissolved, and the board’s functions were transferred to the Singapore Monetary Authority.

About the HKD

Hong Kong has attached its currency to the US dollar since 1983. This had so far helped to make life more predictable for the many commercial and financial firms in the city. The de facto central bank, the Hong Kong monetary authority, buys US dollars if the local currency is too strong or sells them if it is too weak. The Hong Kong dollar is one of the world’s most traded currencies. The symbol of the currency is $ or HKD to differentiate it from other currencies of the dollar. Coins available include 10, 20, and 50 cent coins; 1, 2, 5, and 10 pounds (4.54 kg) coins; and 10, 20, 50, 100, 500, and 1,000 dollar banknotes.

Technical Analysis For SGDHKD

Basically, you want to analyse which is the weaker currency pair and which is the stronger. This allows you to know how currencies are related and traded but how do you analyse them?
The principles that guide you to benefit from a cross trade should technically be the same as for the major. If crosses are created at interbank level, they should be created on the SGD/HKD. Even if they are not available on your preferred broker-dealer platform. 
Given the large daily movements associated with the most exotic couples, it is best to trade them by keeping an eye on short-term indicators. Larger price fluctuations are represented in exotic currency pairs. This mean that the trader who trades them should be prepared for movements that involve thousands of pips. You should also be aware that once an important move has been made, you can swap most of the exotic pairs as soon as another move begins.

Fundamental Analysis For SGDHKD

Technical analysis involves poring over charts to identify patterns or trends. Fundamental analysis (FA) involves poring over economic data reports and news headlines. The pair’s movement is influenced by inflation rates, money supply growth rates, interest rates, and income growth rates. Money supply growth and interest rate differentials are useful indicators of movements in trading the SGD/HKD. The Singapore dollar, as noted above, tends to appreciate more rapidly when inflationary pressures are high. Relative GDP growth, on the other hand, does have the expected impact on the bilateral rate. The Singapore dollar tends to appreciate when income growth in Singapore is relatively strong.
Political unrest also can be useful in analysing this pair. For example, due to the prolonged protests in Hong Kong, investors have started to worry about Hong Kong’s dollar peg. 

What Drives the SGD/HKD Pair?

This particular currency pair is widely affected by the economic stances of the individual countries who uses it. To trade this pair effectively, you should have a fair idea on the nature of the economies of Hong Kong and Singapore and how they affect the SGD/HKD pair. As the Hong Kong dollar differs somewhat from other currencies, so are its economic drivers different. Economic data such as GDP, current accounts, trade balances, and inflation are only significant to a point. Since the Hong Kong dollar can only trade within a narrowband.
Any kind of Black Wednesday-type raid on the HKD would inevitably fail, as the Chinese and Hong Kong economies are so closely linked together. The HKD is not an especially tradable currency. Large banks may be able to make some profit from the fractional fluctuations within the pair markets. But the narrowness of the market dissuades most small speculators from trading.
Therefore, the bulk of trades that use the HKD are for commercial dealings only, or as part of a carry exchange. The Hong Kong dollar actually has a low interest rate, which makes it an attractive currency for traders to bring. Hong Kong dollars may be lent cheaply, and then use the funds to buy a higher yielding bond in a country like New Zealand or Australia.
The Republic of Singapore ranked 36th in the world as it looked at gross domestic product. It is also one of Asia’s richest (in terms of per capita GDP) and one of the most important financial hubs in the world.
The island city-state depends heavily on commerce and its free-market economy. Exports totalled about 188% of Singapore’s GDP in 2014, according to data from The Economist. Imports meanwhile accounted for 163% of that. Subtracting the latter from the former gave you a trade surplus. i.e a whopping 25% of total output except consumption, investment and government expenditure.

When is the Best Time to Trade the SGD/HKD Pair?

The best time for trading is during the overlap of trading hours on the free market. SGD/HKD closes at the same time as these market conditions, so there is no overlap in trading hours between the opening and closing hours. More than 70% of transactions take place when markets overlap, with the US dollar and the Euro being the two most popular trading currencies. USD/JPY are perfect to watch when the Tokyo market is the only one open, as the Bank of Japan has a strong influence on the market. Directly in front of Hong Kong and Singapore, the first Asian trading centre opened in Japan. The Tokyo Stock Exchange (TSE) occupies the largest part of all Asian trading and is one of the most important trading venues for SGD/HKD.
Once you understand when all the major markets are open, you will see a lot of initial action. Understanding what is meant when a particular country’s currency stops trading is key in forex trading. That is the best way to know when to the perfect time to trade.
Local markets offer domestic banks, companies and fund managers the opportunity to buy and sell local currencies. When local markets close, it leads to unknown factors that could affect valuations when local exchanges reopen. Trading in a preferred currency during the opening hours of the open market provides the best liquidity. As you are focused on trading in a single currency, you should consider adapting your trading hours to the times when the local exchange is open.
Lower volatility during trading hours indicates higher liquidity on the open market. Now only that, but also higher prices on the local stock exchange. This can happen when the markets overlap and you trade in a more liquid (and hopefully more profitable) market.
There are many trading strategies that forex traders uses to buy oversold and sell overbought currencies. This work best when support or resistance tends to hold. But reach traders suffer significant losses when support or resistance collapses. However, this can also happen at any time of day, even in the midst of high liquidity and low volatility.
If traders set appropriate targets, they have a workable timetable within which to realize profits.

SGD/HKD Average Trading Volumes

The average trading price in the past one year for the pair has stood at 5.65128, and the average trading volume for the past year is 84,088.73180. The volatility of the pairs has moved from 4.06% in the last 5 years to 4.43% in the last one and in the last 6 months stands at 5.57%. In the past 10 years performance is described with the following values: 

SGD/HKD close: 5.46823; low: 5.32395; high: 6.48773


It is unlikely although not a certain fact. The Singapore government wants a strong Singapore dollar so that they can have more buying power. This should ensure policies are put in place that positively affect the SGD.

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