- Singapore dollar (SGD) falls after four days of gains
- Electronic exports surged 35.1%
- US Dollar (USD) rises after stronger retail sales
- The FOMC rate decision is tomorrow
The US Dollar Singapore dollar (USD/SGD) exchange rate is rising after four days of losses. The pair fell 0.21% lower in the previous session, settling on Tuesday at 1.2948. At 19:00 UTC, USD/SGD trades 0.12% at 1.2963 and is in a range of 1.2925 and 1.2969.
Data showed that Singapore electronics exports rose by the fastest pace in a decade in August thanks to the global tech boom.
Electronic exports rose 35.1% YoY in August after rising an upwardly revised 16.8% in July and marking the fastest pace of growth since 2010.
The strong performance in the tech sector is putting the Singapore economy on track to exceed GDP growth forecasts this year.
However, there is still reason to be modestly cautious after the country’s non-oil exports rose by 10.8%, below the 15% economists expected.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 100.97 at the time of writing, up 0.21% after four days of losses.
The US dollar is rising, rebounding from recent losses after stronger-than-expected US retail sales data and ahead of the Federal Reserve’s interest rate decision tomorrow.
Retail sales unexpectedly rose by 0.1% month on month in August, defying expectations of a 0.2% decline. This was still down from the 1% growth seen in July.
Even so, the data shows that the US consumer remains resilient even as the jobs market shows signs of cooling and wage growth eases.
Attention is now turning to the Federal Reserve’s interest rate decision tomorrow at 2:00 PM ET.
The Fed is expected to start a rate-cutting cycle, but the markets are split over the size of that first rate cut.
Investors are currently pricing in a 63% probability of a 50 basis point rate cut, up from around 34% just a week ago.
Whether the Fed opts for a 25- or 50-basis-point cut, given the pricing uncertainty leading into the event, it is clear the decision will spark volatility in the FX markets.
