USD/SGD – Little Movement Ahead of Singapore CPI

USD/SGD continues to lose ground on Friday, as the pair trades slightly above the 1.4130 in the European session. In the US, there are no economic releases on the schedule. FOMC Member William Dudley, who has sounded positive about a rate hike in December, will deliver remarks at an event in New York. Singapore will release CPI early on Monday.

There are no Singapore releases this week, but the markets will get a look at two key events next week. CPI, the primary gauge of consumer inflation, will be released on Monday, followed by GDP on Tuesday. The Singapore dollar has enjoyed a strong week, gaining over 100 points. If the currency doesn’t slide sharply on Friday, it will mark the first weekly gain for the Sing in the past four weeks.

Although the Fed minutes did not confirm a December rate hike, most analysts concur that the long-awaited move will indeed occur next month. Market expectations have risen to 66% that the Fed will make a move next month. Chris Rupkey, chief financial economist at Bank of Tokyo Mitsubishi, Japan’s largest bank, said he would be “astounded” if the Fed did not raise rates at their next meeting on December 16, especially in light of the strong Nonfarm Payrolls report in October. One major weak spot in the economy is that of weak inflation levels, and the Fed has repeatedly stated that inflation is a prime factor in its decision-making process. Last week’s PPI was awful, posting a second straight decline. On Tuesday, CPI and Core CPI posted small gains of 0.2%, matching the forecast. Are these lukewarm readings enough to convince a majority of Fed members to vote in favor of a hike? Time will tell. Another important factor which must be remembered is that the markets now seem prepared for a small hike of 0.25% or 0.50%, and there is a growing view that a modest move would not cause unwanted turbulence on the global markets.

The US economy continues to show improvement in most areas, but the manufacturing sector continues to lag behind. There was some positive news on Thursday, as the Philly Fed Manufacturing Index posted a small gain of 1.9 points, beating the estimate of 0.1 points. It marked the indicator’s first gain after two consecutive declines. Earlier this week, the Empire State Manufacturing Index posted its fourth straight decline, underlining worsening conditions in the manufacturing sector. In November, the indicator came in at -10.7 points, weaker than the forecast of -5.3 points.

USD/SGD Fundamentals

Friday (Nov. 20)

• 16:15 FOMC Member Dennis William Dudley Speaks

Upcoming Key Releases

Monday (Nov. 23)

• 5:00 Singapore CPI

*Key releases are highlighted in bold

* All times are GMT

USD/SGD for Friday, November 20, 2015

USD/SGD November 20 at 11:45 GMT

USD/SGD 141.27 H: 141.55 L: 140.94

USD/SGD Technical

• USD/SGD has dipped below the 1.41 level for the first time in two weeks.
• 1.4139 remains busy and has switched to a resistance role.
• On the downside, 1.4073 is under pressure. Will this line break during the day?
• Current range: 1.4073 to 1.4139

Further levels in both directions:

• Below: 1.4073, 1.3900 and 1.3823
• Above: 1.4139, 1.4248, 1.4300 and 1.4395

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