USD/SGD – Sing Sticking Close to 1.40

It’s been an uneventful week for USD/SGD, which continues to trade slightly above the 1.40 line. In Friday’s European session, the pair is trading at 1.4040. US markets are closed on Friday for the Christmas holiday, so traders can expect a quiet day from the pair.

Ahead of the Christmas holiday, US releases recorded mixed result on Wednesday. Durable Goods reports were unimpressive, underscoring weakness in the US manufacturing sector. Core Durable Goods slipped by 0.1%, short of the forecast of a 0.1% gain. Durable Goods came in at 0.0%, but this beat the estimate of -0.6%. Housing numbers also disappointed, as New Home Sales dipped to 490 thousand, well off the estimate of 507 thousand. This reading comes on the heels of Existing Home Sales, which posted a weak reading of 4.76 million, its worst performance since April 2014. There was some good news from consumer indicators, as the UoM Consumer Sentiment improved to 92.6 points, above the forecast of 92.1 points and marking a 4-month high.

In one of the most important economic events in 2015, the US Federal Reserve raised interest rates by 0.25 percent, the first rate hike since June 2006. The Fed got the rate ball rolling back in October, when it surprised the markets when it released a statement that it was seriously considering raising rates. Predictably, this caused a buzz in the markets about the Fed’s plans, as speculation earlier in the year about a rate hike failed to materialize. To the credit of Fed chief Janet Yellen and her colleagues, the Fed put into place a carefully-crafted strategy, sending a steady of stream of signals that it was intending to tighten monetary policy, if economic conditions remained positive. This gave the markets ample time to price in a rate hike, and currency market volatility was not excessive after the US rate hike, the first in almost 10 years. Although a hike of 0.25 percent is expected to have limited economic impact, the Fed move has given the US economy a critical vote of confidence, and this will be duly noted by the global markets. As well, this move is expected to be the first in a series of incremental rate hikes over the course of 2016, and higher interest rates means that the US dollar will become even more attractive to investors, at the expense of the greenback’s rivals.

USD/SGD Fundamentals

Friday (Dec. 25)

• There are no US or Singapore releases on the schedule

USD/SGD for Friday, December 25, 2015

USD/SGD December 25 at 12:20 GMT

USD/SGD 140.42 H: 141.12 L: 140.31

USD/SGD Technical

• USD/SDG has shown marginal movement in the Asian and European sessions
• 1.3937 is providing support
• 1.4073 was tested earlier in the day and is a weak resistance line
• Current range: 1.3937 to 1.4073

Further levels in both directions:

• Below: 1.3937, 1.3810 and 1.3721
• Above: 1.4073, 1.4139, 1.4248 and 1.4300

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