USD/SGD – Singapore Dollar Improves on Dovish Statement

USD/SGD has posted gains on Thursday, as the pair trades at 1.4260 just ahead of the North American session. In economic news, the US will release Core Durable Goods Orders and Unemployment Claims. On Wednesday, the Federal Reserve maintained current interest rates and issued a dovish policy statement. In Singapore, the Unemployment Rate edged lower to 1.9%.

There was little surprise in the markets as the Federal Reserve maintained interest rates at 0.25%. The Fed statement was dovish in tone, as policymakers noted that there are soft spots in the economy, such as consumer spending and exports. The inflation picture remains problematic, with the Fed saying that inflation levels will remain low, and may not reach the target of 2.0% until 2018. At the same time, the Fed emphasized that the US labor market remains strong. Will we see another rate hike in March? That’s a tough question to answer, as the central bank has provided any strong hints on its next move. Given the Fed’s continuing concerns about a lack of inflation, it’s difficult to foresee another rate hike in March absent a strong improvement in key US indicators.

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 employment picture remains positive, as the unemployment rate dipped to 1.9%, compared to 2.0% in the previous release.

USD/SGD Fundamentals

Thursday (Jan. 28)

• 8:30 US Core Durable Goods Orders. Estimate -0.1%
• 8:30 US Unemployment Claims. Estimate 281K
• 8:30 US Durable Goods Orders. Estimate -0.6%
• 10:00 US Pending Home Sales. Estimate 1.0%
• 10:30 US Natural Gas Storage. Estimate -215B
• 21:30 Singapore Unemployment Rate. Actual 1.9%

Upcoming Key Events

Friday (Jan. 29)

• 8:30 US Advance GDP. Estimate 0.8%

*Key events are in bold

*All release times are EST

USD/SGD for Thursday, January 28, 2016

USD/SGD January 28 at 6:40 EST

Open: 1.4326 Low: 1.4250  High: 143.27 Close: 142.65

USD/SGD Technical

• USD/SGD has posted gains in the Asian and European sessions
• 1.4368 remains a strong resistance line
• 1.4248 is providing weak support. It is a weak 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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