USD/SGD – Weak Singapore CPI sends Sing Lower

USD/SGD has moved higher on Monday, as the pair trades slightly under the 1.42 line in the North American session. In economic news, Singapore CPI disappointed with a reading of -0.6%. In the US, Manufacturing PMI and Housing Starts both missed their estimates. Manufacturing PMI dipped to 52.6 points, its lowest level since October 2013. Housing Starts dropped sharply to 5.36 million, compared to 5.55 million a month earlier. The estimate stood at 5.39 million.

The Singapore dollar enjoyed a solid week, posting gains of about 130 points. This bucked the recent trend, in which the Sing had posted weekly losses for four consecutive weeks. However, this week has started off on a sour note for the currency, courtesy of a weak CPI reading. CPI, the primary gauge of inflation, posted a decline of 0.6% in October, following the 0.5% decline a month earlier. On Wednesday, Singapore releases GDP, one of the most economic important indicators. The markets are expecting a gain of 0.3% in the third quarter, compared to a small gain of 0.1% in the previous quarter.

The recent Fed policy meeting and subsequent minutes did not confirm a December rate hike, but most analysts feel 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, and recent comments by Fed policymakers have hinted that a rate move is a strong possibility. At the past two policy meetings, the vote against a rate hike was 9-1, but that clearly will not be the outcome at the December meeting. With the US economy showing improvement and employment and consumer indicators pointing upwards, the markets appear 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. One remaining question mark in the rate move puzzle is that of inflation levels. Recent inflation readings have been weak, and the Fed has repeatedly stated that inflation is a key consideration in any decision to raise rates. The markets will get a look at key inflation indicators shortly before the critical Fed policy meeting on December 16.

USD/SGD Fundamentals

Monday (Nov. 23)

• Singapore CPI. Actual 0.6%
• 14:45 US Flash Manufacturing PMI. Estimate 54.0 points. Actual 52.6 points
• 15:00 US Existing Home Sales. Estimate 5.39M. Actual 5.36M

Upcoming Key Releases

Tuesday (Nov. 24)

• 13:30 US Preliminary GDP. Estimate 2.0%
• 15:00 US CB Consumer Confidence. Estimate 99.3 points

*Key releases are highlighted in bold

* All times are GMT

USD/SGD for Monday, November 23, 2015

USD/SGD November 23 at 16:15 GMT

USD/SGD 141.86 H: 141.55 L: 140.94

USD/SGD Technical

• USD/SGD posted gains in the Asian session. The pair has leveled in the European and North American sessions.
• 1.4139 remains busy and has switched to a support role. It is a weak line.
• 1.4428 is a strong resistance line.
• Current range: 1.4139 to 1.4428

Further levels in both directions:

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

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