USD/SGD – Little Movement as Singapore CPI Dips

USD/SGD is unchanged on Monday, as the pair trades at 1.4290 in the North American session. In economic news, Singapore CPI posted a decline of 0.6%. There are no US releases on the schedule. On Tuesday, the US will release CB Consumer Confidence, a key indicator.

Singapore inflation remains in negative territory, as CPI came in at -0.6% in December, slightly better than the November reading of -0.8%. Annual Core CPI for 2015 posted a weak gain of 0.5%, compared to 1.9% in 2014. The Singapore central bank does not expect inflation to improve significantly in 2016, which does not bode well for the economy. The Singapore dollar enjoyed a strong week, gaining over 100 points. Despite these gains, the Singapore dollar has lost over 200 points in January, as minor currencies like the Sing have been hit hard in early 2016 by the slowdown in China and the collapse of oil. This has resulted in nervous investors fleeing from risk and snapping up safe-haven currencies such as the yen and US dollar.

The US economy has been generally strong, and received a vote of support from the Federal Reserve when it raised interest rates in December. However, one soft spot which has garnered a lot of concern is the inflation picture. This was underscored last week, as key inflation numbers missed their estimates. CPI dropped 0.1%, short of the estimate of 0.0%. Core CPI also softened, posting a gain of 0.1%. This was short of the forecast of 0.2%. Weak inflation indicators remain a concern for Federal Reserve policymakers, who must decide whether another interest rate hike would be appropriate in early 2016. Meanwhile, US jobless claims jumped to their highest level in 11 months, as the reading of 293 thousand was much worse than the estimate of 279 thousand. Will these weak numbers dampen Fed enthusiasm for a rate hike? There is speculation that the Fed could make a move in March, contingent on the strength of the US economy. A lack of inflation points to slack in the economy, and the Fed could hold off on another hike until inflation levels improve.

USD/SGD Fundamentals

Sunday (Jan. 24)

• 00:00 Singapore Consumer Price Index. Actual -0.6%

Monday (Jan. 25)

• There are no Singapore or US events on the schedule

Key Upcoming Events

Tuesday (Jan. 26)

0:00 US CB Consumer Confidence. Estimate 96.6 points

*Key events are in bold

*All release times are EST

USD/SGD for Monday, January 25, 2016

USD/SGD January 25 at 9:20 EST

Open: 142.88 Low: 1.4257  High: 143.16 Close: 142.90

USD/SGD Technical

• USD/SGD has been choppy throughout the day.
• 1.4368 is a strong resistance line
• 1.4248 is a weak support line
• Current range: 1.4248 to 1.4368

Further levels in both directions:

• Below: 1.4248, 1.4139 and 1.4016
• Above: 1.4368, 1.4459, 1.4530, and 1.4682

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