- Singapore Dollar (SGD) falls after 3-days of gains
- Tight monetary policy keeps SGD supported
- US Dollar (USD) falls against major peers
- US payrolls revised lower
The US Dollar Singapore Dollar (USD/SGD) exchange rate rose on Wednesday after 3-days of losses. The pair fell -0.28% in the previous session, settling on Wednesday at 1.3042. At 18:00 UTC, USD/SGD trades +0.05% at 1.3047 and is in a range of 1.3087 to 1.3042.
The Singaporean dollar has strengthened to an 18 months high versus the greenback over the past few months owing to the tighter Singapore central banking policy compared to the Federal Reserve.
The Singapore central bank has maintained its hawkish monetary policy stance since October, even as June’s inflation figures came in lower than expected.
July inflation data is due to be released on Friday and is expected to show that inflation increased slightly to 2.7% year on year in July, up from 2.4%. The core inflation rate which was at 2.9% annually is likely of more interest to the Monetary Authority of Singapore and it is expected to maintain its 2.9% right.
The US Dollar is rising against the Singapore Dollar but fell against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 101.14 at the time of writing, down 0.29%, marking a fourth straight losing streak.
The US dollar is falling to a fresh 2024 low against its major peers after shop dammit revision TUS jobs in the year to March 2024.
Mango, the data released showed that employers added 818,000 fewer jobs across the year, meaning that the UK and U.S. jobs market is weaker than originally anticipated.
The data is very consistent, with the Federal Reserve starting to cut rates as soon as September, although it’s difficult to decipher what this means regarding the pace of easing.
Traders will now focus their attention on Federal Reserve chair Jerome Powell’s speech on Friday at the Jackson Hole economic symposium for further clues on his views on the labour market. Investors will be watching closely to see whether he references today’s data.
Given that the market is fully pricing in a rate cut, it will be looking for clarity on the size of that rate cut next month and whether this is the start of a rate-cutting cycle.
