USD/SGD is steady on Tuesday, as the pair trades slightly under the 1.4130 early in the North American session. On the release front, US Preliminary GDP posted a gain of 2.1%. Later in the day, we’ll get a look at CB Consumer Confidence, with the estimate standing at 99.3 points. On Wednesday, there are two key major events – Core Durable Goods Orders and Unemployment Claims.
There were no surprises from US Preliminary GDP in the third quarter. The revised GDP report came in at 2.1%, very close to the Advanced GDP reading of 2.0%. Although these numbers pale in comparison to the blistering 3.7% we saw in Q2, they nonetheless point to respectable growth by the US economy in a difficult global environment. The positive GDP release means that a rate hike at the December policy meeting remains a strong possibility.
Last week’s Fed minutes did not confirm a December rate hike, but most analysts feel that the long-awaited move will indeed occur next month. Market expectations have risen to 66% that the Fed will make a move next month, and recent comments by Fed policymakers have hinted that a rate move is a strong possibility. At the past two policy meetings, the vote against a rate hike was 9-1, but that clearly will not be the outcome at the December meeting. With the US economy showing improvement and employment and consumer indicators pointing upwards, the markets appear prepared for a small hike of 0.25% or 0.50%, and there is a growing view that modest, incremental moves would not cause unwanted turbulence on the global markets. One remaining question mark in the rate move puzzle is that of inflation levels. Recent inflation readings have been weak, and the Fed has repeatedly stated that inflation is a key consideration in any decision to raise rates. The markets will get a look at key inflation indicators shortly before the critical Fed policy meeting on December 16.
The Singapore dollar looked strong last week, posting gains of about 130 points. This bucked the recent trend, in which the Sing had posted weekly losses for four consecutive weeks. However, this week has started off on a sour note for the currency, courtesy of a weak CPI reading. CPI, the primary gauge of inflation, posted a decline of 0.6% in October, following the 0.5% decline a month earlier. On Wednesday, Singapore releases GDP, one of the most economic important indicators. The markets are expecting a gain of 0.3% in the third quarter, compared to a small gain of 0.1% in the previous quarter.
- 13:30 US Preliminary GDP. Estimate 2.0%. Actual 2.1%
- 13:30 US Goods Trade Balance. Estimate -61.8B. Actual -58.4B
- 13:30 US Preliminary GDP Price Index. Estimate 1.2%. Actual 1.3%
- 14:00 US S&P/CS Composite-20 HPI. Estimate 5.2%. Actual 5.5%
- 15:00 US CB Consumer Confidence. Estimate 99.3 points
- 15:00 US Richmond Manufacturing Index. Estimate 0 points
Upcoming Key Events
Wednesday (Nov. 25)
- 13:30 US Core Durable Goods Orders. Estimate 0.5%
- 13:30 US Unemployment Claims. Estimate 273K
*Key releases are highlighted in bold
* All times are GMT
USD/SGD for Tuesday, November 24, 2015
USD/SGD November 24 at 14:10 GMT
USD/SGD 141.30 H: 141.84 L: 141.17
- 1.4300 is a strong resistance line.
- 1.4248 has switched to a support role.
- Current range: 1.4248 to 1.4300
Further levels in both directions:
- Below: 1.4248, 1.4139, 1.4073 and 1.3900
- Above: 1.4300, 1.4395 and 1.4539
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