USD/SGD – Steady as US Manufacturing Data Meets Expectations

USD/SGD has started the week quietly, as the pair trades just above the 1.40 line in the North American session. In the US, the key event of the day, ISM Manufacturing PMI, came in at 50.1 points, very close to the forecast of 50.0 points.

The Federal Reserve surprised the markets last week with a hawkish statement, and the Singapore dollar lost ground as the US dollar posted gains against most major currencies after the Fed announcement. The Fed said that a rate hike was a possibility in December, depending on employment and inflation numbers. The markets had essentially written off a move by the Fed before 2016, so the statement caused sharp volatility in the currency markets, with the US dollar showing broad gains after the dust had settled. With the next Fed meeting is mid-December, and the markets will be in alert mode for any further hints about a rate hike. As well, key US numbers will be closely monitored, especially employment and inflation data, as the strength of these numbers in the next several weeks will play a critical role in determining whether the Fed will press the rate trigger in December. Still, traders should keep in mind that the markets sometimes overreact to Fed statements or comments from Fed policymakers, and the central bank could easily continue to wait on the sidelines until 2016.

With the Federal Reserve statement behind us, the markets can once again focus on economic releases. There was much anticipation ahead of the US Advance GDP for the third quarter, which was released on Thursday. As it turned out, this key event didn’t shake up the markets, as the reading of a 1.5% gain was almost identical to the forecast of 1.6%. Still, this figure is much lower than the Q2 Final GDP of 3.9%, pointing to a slowdown in the US economy. Meanwhile, Unemployment Claims beat the estimate for a fourth straight week, coming in at 260 thousand. The estimate stood at 264 thousand. On Friday, US key releases wound up the week on a positive note. Employment Cost Index jumped to 0.6%, pointing to an increase in wages for US workers. The UoM Consumer Sentiment improved to 90.0 points, within expectations.

USD/SGD Fundamentals

Monday (Nov. 2)

• 14:45 US Final Manufacturing PMI. Estimate 54.0 points. Actual 54.1 points
• 15:00 US ISM Manufacturing PMI. Estimate 50.0 points. Actual 50.1. points
• 15:00 US Construction Spending. Estimate 0.5%. Actual 0.6%
• 15:00 US ISM Manufacturing Prices. Estimate 39.5 points. Actual 39.0 points
• 17:00 FOMC Member John Williams Speaks
• 19:00 US Loan Officer Survey

USD/SGD for Monday, November 2, 2015

USD/SGD November 2 at 17:00 GMT

USD/SGD 140.14 H: 140.42 L: 139.78

USD/SGD Technical

• USD/SGD was flat in the Asian session, and has showed marginal movement in the European and North American sessions.
• 1.3900 is an immediate support level.
• 1.4073 is a weak resistance line.
• Current range: 1.3900 to 1.4073

Further levels in both directions:

• Below: 1.3900, 1.3823 and 1.3746
• Above: 1.4073, 1.4139 and 1.4248

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