USD/SGD has posted slight gains on Thursday, as the pair trades slightly under the 1.41 line in the North American session. US markets are closed for the Thanksgiving holiday, and there are no Singapore events for the remainder of the week.
The Singapore dollar has flexed some muscle in the past two weeks, posting gains of about 250 points in that short period. Earlier this week, Sing was buoyed by an excellent Singapore GDP reading of a 1.9% gain in the third quarter. This easily beat the estimate of 0.3% and was a sharp improvement from the Q2 reading of -2.6%. Earlier in the week, Singapore CPI, the primary gauge of inflation, posted a decline of 0.6% in October, a near repeat of the 0.5% decline a month earlier.
There were a host of US events on Wednesday, and the key releases played to mixed reviews. Unemployment Claims plunged to 260 thousand, well off the estimate of 273 thousand. There was more good news from Core Durable Goods, which rebounded with a strong gain of 0.5%, matching the forecast. UoM Consumer Sentiment improved to 91.3 points, but the markets were overly optimistic, as the estimate stood at 93.2 points. This consumer confidence indicator comes on the heels of CB Consumer Confidence, which dropped to 90.4 points, nowhere close to the estimate of 99.3 points. These weak consumer confidence readings could raise concerns, as soft consumer confidence numbers could translate into weaker consumer spending, which is a key driver of economic growth.
Will the Federal Reserve press the rate trigger at the December policy meeting? 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. The Fed hinted at a rate hike in its October policy statement, and the markets have been abuzz ever since. Last week, New York Fed President William Dudley said there is a “strong case” for a rate hike in December as long as economic data remains strong. 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 will not cause turbulence on the global markets. One fly in the ointment is that of weak inflation levels, as the Fed has repeatedly stated that inflation is a key consideration in any decision to raise rates. With the critical Fed meeting only a few weeks away, every key indicator and comment from a Fed member will be under close scrutiny from the markets.
- All Day – US Bank Holiday
*Key releases are highlighted in bold
* All times are GMT
USD/SGD for Thursday, November 26, 2015
USD/SGD November 26 at 14:00 GMT
USD/SGD 140.77 H: 140.88 L: 140.26
- USD/SGD posted slight gains in the Asian session, and has been flat in the European and North American sessions.
- 1.4139 is an immediate resistance line.
- 1.4073 continues to be tested and is a weak support line. It could see further action in the North American session.
- Current range: 1.4073 to 1.4139
Further levels in both directions:
- Below: 1.4073, 1.3937 and 1.3810
- Above: 1.4139, 1.4248, 1.4300 and 1.4395
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