USD/SGD has posted strong gains on Thursday, as the pair trades at 1.3620 in the North American session. In economic news, Singapore GDP posted a flat reading of 0.0%. We’ll get a look at Retail Sales later on Thursday. In the US, CPI and Core CPI both posted small gains of 0.1%, short of their estimates. US Unemployment Claims dropped sharply to 253 thousand, well below the forecast.
US data was mixed on Thursday. CPI and Core CPI, key gauges of consumer inflation, posted small gains of 0.1%. The Core CPI release was particularly disappointing, coming after two consecutive gains of 0.3%. The weak inflation numbers will make it difficult to make a case for raising interest rates in the first half of 2016 and bolsters the dovish position of Janet Yellen and her supporters. Deustche Bank analyst Brett Ryan summed up the soft US inflation picture, noting that “we’re still importing deflation from other areas of the world”. There was much better news on the employment front, as Unemployment Claims fell to 253 thousand, its lowest weekly reading since March 1973. This release is another confirmation of a robust US labor market.
US retail sales reports for March disappointed. Core Retail Sales improved to 0.2%, but fell short of the forecast of 0.4%. Retail Sales surprised with a decline of 0.3%, shy of the estimate of a 0.1% gain. It marked the second straight drop for the indicator. Consumer spending represents the biggest part of the economy, so these figures could spell trouble at a time that the export sector remains soft due to weak global demand. PPI, a key gauge of inflation in the manufacturing sector, continues to struggle, posting a third decline in four months. The index dipped 0.1%, well off the estimate of a 0.3% gain.
Singapore’s economy showed no sign of expansion in the first quarter, with GDP coming in at 0.0%. This reading was much weaker than the 6.2% gain recorded in the fourth quarter. The Singapore dollar reacted sharply, losing over 100 points. China is one of Singapore’s major trade partners, making the Singapore dollar sensitive to key Chinese indicators. The Sing lost ground on Wednesday, as the Chinese trade surplus narrowed for a second straight month. The indicator dropped to $195 billion, shy of the forecast of $203 billion. The weak figure points to continuing weakness in the world’s second largest economy. China releases first quarter GDP on Thursday, with the markets braced for the indicator to edge lower to 6.7%, down from 6.8% in the previous quarter. If the Chinese economy did slow down in Q1, we could see the Singapore dollar continue to lose ground.
Thursday (April 14)
- 8:30 US CPI. Estimate 0.2%. Actual 0.1%
- 8:30 US Core CPI. Estimate 0.2%. Actual 0.1%
- 8:30 US Unemployment Claims. Estimate 270K. Actual 253K
- 10:30 FOMC Member Jerome Powell Speaks
- 10:30 US Natural Gas Storage. Estimate 1B
- 13:01 US 30-year Bond Auction
- 22:00 Chinese GDP. Estimate 6.7%
Upcoming Key Events
Friday (April 15)
- 00:00 Singapore Retail Sales
- 10:00 US Preliminary UoM Consumer Sentiment. Estimate 91.9
*Key events are in bold
*All release times are DST
USD/SGD for Thursday, April 14, 2016
USD/SGD April 14 at 10:20 DST
Open: 1.3506 Low: 1.3502 High: 1.3667 Close: 1.3632
- USD/SGD posted very sharp gains in the Asian session. The pair posted slight losses in the European session and is steady in North American trade
- 1.3535 has switched to a support role after sharp gains by USD/SGD
- 1.3639 was tested earlier in resistance and is a weak line. It could break in the North American session
- Current range: 1.3535 to 1.3639
Further levels in both directions:
- Below: 1.3535, 1.3401, 1.3279 and 1.3145
- Above: 1.3639, 1.3721 and 1.3854
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