USD/SGD has posted small gains on Tuesday. In the European session, the pair is trading slightly below of the 1.38 line. On the release front, the Singapore unemployment rate was unchanged, while Retail Sales were mixed. In the US, Retail Sales and PPI numbers were weak, albeit expected, as the indicators posted slight declines. On Wednesday, the FOMC will set interest rates and release a monetary policy statement.
In Singapore, the unemployment rate remained at a sparkling 1.9%, unchanged from the previous reading. Retail Sales painted a mixed picture. Retail Sales climbed 7.5 percent year, compared to the previous release of 2.8%. However, the monthly report for January posted a decline of 1.2%, little changed from the previous reading. The Singapore economy has taken a hit from the Chinese slowdown, as the Asian giant is a major export market for Singapore. The markets are expecting some headwinds in 2016, but the Singapore dollar has looked impressive so far this year, gaining about 440 points against its US counterpart.
All eyes will be on the Federal Reserve on Wednesday, as the Fed concludes a two-day policy meeting. Most experts are expecting the Fed to remain on the sidelines and not raise rates, given current economic conditions. Although the US economy continues to expand, growth has been softer in 2016 compared to the red-hot pace which marked the economy in the second half of 2015. The primary trouble spot in the economy is the inflation picture, as inflation levels remains very low, a result of weak global demand and low oil prices. Fed policymakers are divided on how to respond to persistently low inflation. Some FOMC members favor preempting inflation with a rate hike, while others feel that the economy is currently too fragile for such a move. The Fed will likely maintain its tightening bias and continue to monitor key economic indicators. If the US economy shows strength in the first half of 2016, a rate hike is a strong possibility in the middle of the year.
Tuesday (March 15)
- 1:00 Singapore Retail Sales (MoM). Actual -1.2%
- 1:00 Singapore Retail Sales (YoY). Actual 7.5%
- 8:30 US Core Retail Sales. Estimate -0.2%. Actual -0.1%
- 8:30 US PPI. Estimate -0.2%. Actual -0.2%
- 8:30 US Retail Sales. Estimate -0.1%. Actual -0.1%
- 8:30 US Core PPI. Estimate 0.1%. Actual 0.0%
- 8:30 US Empire State Manufacturing Index. Estimate -10.3 points. Actual 0.6 points
Upcoming Key Events
Wednesday (March 16)
- 8:30 US Building Permits. Estimate 1.20M
- 8:30 US Core CPI. Estimate 0.2%
- 14:00 FOMC Economic Projections
- 14:00 FOMC Statement
- 14:00 FOMC Federal Funds Rate
- 14:30 FOMC Press Conference
*Key events are in bold
*All release times are DST
USD/SGD for Tuesday, March 15, 2016
USD/SGD March 15 at 8:20 DST
Open: 1.3763 Low: 1.3751 High: 1.3818 Close: 1.3789
- 1.3810 is a weak resistance line
- 1.3721 is providing support
- Current range: 1.3721 to 1.3810
Further levels in both directions:
- Below: 1.3721, 1.3639 and 1.3535
- Above: 1.3810, 1.3927 and 1.4016
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