- Singapore dollar (SGD) falls after yesterday’s gains
- Singapore inflation cooled to 1.8%
- US Dollar (USD) rises after steep losses yesterday
- USD volumes are low due to the Thanksgiving holiday
The US Dollar Singapore dollar (USD/SGD) exchange rate is rising, giving back some of yesterday’s losses. The pair fell 0.47% in the previous session, settling on Wednesday at 1.3402. At 16:00 UTC, USD/SGD trades +0.16% at 1.3424 and is in a range of 1.3407 and 1.3449.
The Singapore Dollar was under pressure as investors continued to digest inflation data that was released earlier in the week. Singapore’s headline inflation fell to 1.4% in October, down from 2% in September. This was also lower than analysts’ expectations of 1.8% and marked the first time that Singapore’s inflation fell below the 2% target since March 2021.
Meanwhile, core inflation, which excludes more volatile items such as food and fuel, eased to 2.1% from 2.8%. This was also below forecasts of 2.5%.
The Monetary Authority of Singapore dollar doesn’t use interest rates to set its monetary policy but instead stabilises the price of goods through the management of the exchange rate.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 106.17 at the time of writing, up 0.09%, after falling 0.87% yesterday.
The USD was edging higher amid thin volumes due to the Thanksgiving holiday. The dollar recovered from a two-week low after a series of solid U.S. economic data.
US Q3 GDP was upwardly revised to 1.9%. Jobless claims were lower than expected, and the core PCE rose to 2.8%, moving away from the Fed’s 2% target.
What the market is pricing in a 60% probability of a 25 basis point rate cut in December, expectations for rate cuts across 2025 have been reined in.
Looking ahead, the US economic calendar remains light again tomorrow, going to the half day for the U.S. stock market, which will likely see many traders away from their desks.
