USD/SGD has posted slight losses on Monday, as the pair trades at the 1.41 line in the North American session. In economic news, Chicago PMI and Pending Home Sales were well short of the forecast. The markets will be looking for better news from ISM Manufacturing PMI, Tuesday’s key event. There are no Singapore releases this week.
It was a dismal start to the new trading week for US releases. Chicago PMI slid into contraction mode, dropping sharply from 56.2 points to 48.7 points. This was way off the estimate of 54.3 points. There was little relief from Pending Home Sales, which posted a weak gain of 0.2%, compared to the forecast of 1.6%. However, the housing indicator managed to break a string of two consecutive declines. Market attention has shifted to Tuesday’s key release, the ISM Manufacturing PMI. Recent US manufacturing numbers have been weak, so if the PMI follows suit, the greenback could lose ground.
The Singapore dollar has flexed some muscle in the past two weeks, gaining around 150 points in that period. 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%. The news was not as positive from 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.
Solid US numbers, especially from the labor market, has increased speculation that the Federal Reserve will change monetary course and raise interest rates for the first time in ten years. Unemployment Claims were down sharply last week, and even a lukewarm Nonfarm Payroll report late in the week should not present an obstacle for the Fed. However, one important factor against a rate raise is that of low inflation levels, as the Fed has noted in the past that inflation is an important factor in the rate decision process. We’ll get a look at one more round of CPI and PPI reports prior to the Fed policy meeting on December 16, and these releases could cause some volatility in the markets if they are not close to the estimates. Meanwhile, the Fed guessing game continues, and the markets will be closely following every key release and comments from Fed members in the two weeks leading up to the critical December policy meeting.
Monday (Nov. 30)
- 14:45 US Chicago PMI. Estimate 54.3 points. Actual 48.7 points
- 15:00 US Pending Home Sales. Estimate 1.6%. Actual 0.2%
Upcoming Key Events
Tuesday (Dec. 1)
- 15:00 US ISM Manufacturing PMI. Estimate 50.6 points
*Key releases are highlighted in bold
*All release times are GMT
USD/SGD for Monday, November 30, 2015
USD/SGD November 30 at 18:35 GMT
USD/SGD 141.00 H: 141.57 L: 140.82
- USD/SGD was flat in the Asian session, and has posted slight losses in the European session.
- 1.4139 is a weak resistance line.
- 1.4073 is under pressure and could be tested during 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