The Singapore dollar rebounded to its highest point since August 4th. The USD/SGD exchange rate retreated to a low of 1.3385, which was much lower than this month’s high of 1.3762. It has retreated by over 7.6% from the highest point this year.
FOMC minutes and Singapore GDP dataThe USD/SGD exchange rate has been under pressure in the past few days. It retreated on Wednesday as investors reflected on the latest FOMC minutes. These minutes revealed that most Fed officials had a cautious view of future interest rates.
In that meeting, the Fed decided to leave interest rates unchanged between 5.25% and 5.50%. Jerome Powell, the bank’s governor, maintained that the Fed would be data-dependent when making its next decisions.
The economic numbers revealed that the US unemployment rate rose to 3.9% in October as the economy created 150k jobs. And last week, data showed that the Consumer Price Index (CPI) fell to 3.2%.
Therefore, most economists believe that the Federal Reserve will maintain interest rates at the current range and then slash them in 2024.
The USD/SGD price also retreated after the strong Singapore GDP data. According to the statistics agency, Singapore’s economy expanded by 1.4% in Q3, better than the median estimate of 1.0%. This growth translated to a 1.15 growth, also higher than the expected 0.7%.
These numbers mean that Singapore’s economy will avoid a recession even as its growth slows. The most recent data showed that the country’s inflation stood at 4.1% in September, higher than 4.0% in August. It has dropped from over 7% during the pandemic.
The Singapore Monetary Authority has embraced a cautious tone recently. It left its monetary policy unchanged and increased its frequency.
Watch here: https://www.youtube.com/embed/CEgMKaR0MD8?feature=oembedUSD/SGD technical analysis
The daily chart shows that the USD to SGD exchange rate drifted downwards in the overnight session. It has moved below the 50-day and 25-day Exponential Moving Averages (EMA).
Also, the pair has moved below the 23.6% Fibonacci Retracement level while the Relative Strength Index (RSI) moved below the oversold level.
Therefore, the outlook for the USD/SGD pair is bearish, with the next point to watch being the lower side of the ascending channel. This means it could drop to the support at 1.3297. A break below that level will see it drop to the key support at 1.3200.
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