- Singapore dollar (SGD) falls after losses last week
- Singapore inflation cooled by less than expected
- US Dollar (USD) rises against major peers
- US PMI data was mixed with services rising and manufacturing contracting
The US Dollar Singapore dollar (USD/SGD) exchange rate is rising after losses last week. The pair fell 0.6% lower in the previous week, settling on Friday at 1.2897. At 19:00 UTC, USD/SGD trades 0.04% at 1.2901 and is in a range of 1.2899 and 1.2936.
Singapore’s inflation cooled by less than expected in August. The closely watched key consumer price gauge rose 2.7% year on year, higher than economists’ forecasts, in the final reading before the next review of monetary policy
core inflation, which excludes more volatile items such as transport and accommodation costs, was below the 2.6% forecast and the July rate of 2.5%.
Meanwhile, the headline inflation measure in August was up 2.2% from the same month a year earlier.
Inflation in the financial hub has cooled from a peak of 5.5% in early 2023 and dropped below 3% in June.
The Monetary Authority of Singapore has not changed policy since raising interest rates in October 2022. The next Monetary Policy review is next month although the date is yet to be announced.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 100.82 at the time of writing, up 0.1%, marking the fourth day of gains.
The US dollar has risen across the board as investors digest the latest US PMI data and commentary from three Federal Reserve officials.
The US composite PMI was down slightly in September as robust growth in the service sector was met with a steep contraction in manufacturing. The composite PMI fell to 54.4 in September, down from 54.6 in August, which was more or less in line with forecasts of 54.3.
Meanwhile, Fed speakers defended the 50 basis point rate cut from the Federal Reserve.
Atlanta Fed President Raphael Bostic said that lower inflation and an increased risk to jobs justified further rate cuts.
The three Fed officials said they are prepared to support further rate cuts now that they’ve gained confidence that inflation is on the way to the Fed’s 2% target.
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