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USD/SGD – Singapore GDP Jumps, US Jobless Claims Shines

USD/SGD is steady on Wednesday, as the pair trades slightly under the 1.41 line in the North American session. On the release front, Singapore GDP surged 1.9%. In the US, it was a busy day ahead of the Thanksgiving holiday on Thursday. Unemployment Claims and Core Durable Goods posted solid readings, but UoM Consumer Sentiment missed expectations.

The Singapore dollar continues to post gains against its US counterpart. The 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.

It’s been a mixed day for key US releases. 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 this figure fell short of the forecast of 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.

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.

The guessing game continues regarding a rate move by the Federal Reserve, which would be the first such step in 10 years. 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. 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 fly in the ointment is that of persistently 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.

USD/SGD Fundamentals

Wednesday (Nov. 25)

*Key releases are highlighted in bold

* All times are GMT


USD/SGD for Wednesday, November 25, 2015

USD/SGD November 25 at 15:50 GMT

USD/SGD 140.81 H: 140.96 L: 140.16


USD/SGD Technical

S3 S2 S1 R1 R2 R3
1.3810 1.3937 1.4073 1.4139 1.4248 1.4300

Further levels in both directions:

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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