USD/SGD – Singapore Dollar Surges, Flirts with 1.40 Level

USD/SGD has posted sharp losses on Thursday, as the pair trades just below the 1.40 level early in the North American session. In economic news, US Unemployment Claims disappointed, climbing to 285 thousand. On Friday, there are key events in the US and Singapore. The US will release Nonfarm Payrolls, one of the most important economic indicators. Singapore will release Foreign Reserves.

The Singapore dollar has joined the rank of other minor currencies, such as the Australian and New Zealand dollars, posting sharp gains this week against the US dollar. The Sing has jumped about 300 points since Tuesday, as USD/SGD is trading at eight-week lows. The US dollar has fallen sharply following disappointing numbers from the employment and services sectors. ADP Nonfarm Payrolls, which precedes the official NFP report on Friday, dropped to 205 thousand in January, compared to 257 thousand a month earlier. On Thursday, Unemployment Claims rose to 285 thousand, above the expectations of 279 thousand. There was more bad news from ISM Non-Manufacturing PMI, a key gauge of the services sector. The index dipped to 53.2 points in January, its worst showing since March 2014.

One of the key factors in the Federal Reserve decision to raise rates in December was the strength of the labor market. Since then, however, employment numbers have not impressed, and this factor could delay another rate hike by the Federal Reserve. Policymakers will likely want to see stronger job numbers before raising rates again in March. In the heady days following the Fed’s historic rate hike, there was talk of up to four rate hikes in 2016, but this appears unlikely, given the fact that the US economic growth has slowed and inflation remains at low levels.

USD/SGD Fundamentals

Thursday (Feb. 4)

• 2:15 US FOMC Member Eric Rosengren Speaks
• 7:30 US Challenger Job Cuts. Actual 41.6%
• 8:30 US Unemployment Claims. Estimate 279K. Actual 285K
• 8:30 US Preliminary Nonfarm Productivity. Estimate -1.5%. Actual -3.0%
• 8:30 US Preliminary Unit Labor Costs. Estimate 3.9%. Acutal 4.5%
• 10:00 US Factory Orders. Estimate -2.5%
• 10:30 US Natural Gas Storage. Estimate -170B

Friday (Feb. 5)

• 8:30 US Nonfarm Employment Change. Estimate 189K
• 8:30 US Average Hourly Earnings. Estimate 0.3%

*Key events are in bold

*All release times are EST

USD/SGD for Thursday, February 4, 2016

USD/SGD February 4 at 9:15 EST

Open: 1.4166 Low: 1.3986  High: 1.4167 Close: 139.86

USD/SGD Technical

• USD/SGD was flat in the Asian session. The pair has posted losses in the European and North American sessions
• 1.4016 has switched to a resistance role following strong losses by the pair. It is a weak line and could see further action in the North American session.
• 1.3937 is providing support and could face pressure during the North American session
• Current range: 1.3937 to 1.4016

Further levels in both directions:

• Below: 1.3937, 1.3810 and 1.3721
• Above: 1.4016, 1.4139, 1.4248 and 1.4368

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