We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • Asia #FX markets will be closely watching for developments in the ongoing China-led RCEP trade negotiations against the backdrop of slower global growth and rising protectionism. Get your market update from @ZabelinDimitri here: https://t.co/HZ8Loqj3Ey https://t.co/zTNLq11agI
  • How do you think markets will react to tomorrow's #FOMC meeting?
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Gold: 0.05% Oil - US Crude: -0.38% Silver: -0.41% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/9AiehtJMsK
  • The Norwegian Krone and crude #oil prices will be in for turbulent week ahead of an avalanche of central bank rate decisions against the backdrop of political volatility in the middle east. Get your market update from @ZabelinDimitri here: https://t.co/1PKtivOiFv #OOTT https://t.co/IdHpQbAgNe
  • Fantastic thread on the #Fed including explainer on recent repo market cash crunch PS - I highly encourage giving @Trinhnomics a follow https://t.co/GYwqXuTfjY
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: -0.04% 🇪🇺EUR: -0.04% 🇬🇧GBP: -0.06% 🇯🇵JPY: -0.09% 🇦🇺AUD: -0.20% 🇳🇿NZD: -0.23% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/x5I15C64eW
  • #USDJPY's uptrend has stalled, probably while the market awaits the #Fed. It's looking a little stretched but not seriously threatened. https://www.dailyfx.com/forex/technical/home/analysis/usd-jpy/2019/09/18/Japanese-Yen-Remains-Defensive-As-Dollar-Bulls-Eye-Key-Resistance-.html?utm_source=Twitter&utm_medium=Cottle&utm_campaign=twr
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.68%, while traders in France 40 are at opposite extremes with 81.16%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/k2BRFZYdBl
  • 🇦🇺 AUD Unemployment Rate (AUG), Actual: N/A Expected: 5.2% Previous: 5.2% https://www.dailyfx.com/economic-calendar#2019-09-19
  • Cautious "risk-off" tilt at early phase of Wednesday's session. Pro-risk #AUD and #NZD falling alongside #Nikkei225 futures as haven-linked #USD rises. Follow-through may be lacking until the #Fed passes later today https://t.co/0TLRTELdWv
USD/SGD May Reverse as Singapore Economy Contracts Most Since 2012

USD/SGD May Reverse as Singapore Economy Contracts Most Since 2012

2019-07-12 04:50:00
Daniel Dubrovsky, Analyst
Share:

Singapore Dollar, GDP Talking Points

  • SGD falls as Singapore’s economy sharply contracts in Q2
  • Softer CPI, trade war risk places focus on MAS SGD policy
  • USD/SGD downtrend struggling around falling resistance

Trade all the major global economic data live as it populates in the economic calendar and follow the live coverage for key events listed in the DailyFX Webinars. We’d love to have you along.

The SGD weakened after the latest GDP report showed that Singapore’s economy unexpectedly contracted by the most since 2012. The first estimate of second quarter GDP pointed to a 3.4 percent decline versus +0.5% anticipated and from +3.8% in the first quarter. Meanwhile, year-on-year GDP clocked in at just +0.1 percent which was the slowest pace of expansion since 2009.

Singapore Dollar Falls as GDP Contracts

USD/SGD May Reverse as Singapore Economy Contracts Most Since 2012

Chart Created in TradingView

The details of the report revealed that industrial components of growth contracted. Manufacturing and construction declined 6.0 and 7.6 percent respectively (QoQ). Combining these two segments of the economy adds up to roughly 25% of overall GDP according to the Department of Statistics Singapore. Furthermore, there was also a 1.5% contraction in services.

According to estimates by Bloomberg, economists are anticipating growth of about 2.1% y/y in 2019. Today’s dismal readings undermine the outlook and puts the Monetary Authority of Singapore (MAS) in a tight spot. Looking at the chart below, headline CPI in the city-state has been steadily creeping higher. While the MAS revised CPI (all items) estimates lower, softer economic activity could also dampen headline inflation.

This places the focus on whether or not the monetary authority could continue its “gradual appreciation” of the Singapore Dollar Nominal Effective Exchange Rate (S$NEER). A stronger currency works to dampen rising price pressures. Meanwhile, the impact of the US-China trade war is quite noticeable given the sectors most hurt in today’s lackluster growth figures. It is unclear if the trade truce reached by the two nations may last.

Singapore GDP and Inflation

USD/SGD Technical Analysis

Below, USD/SGD finds itself oscillating between support at 1.3516 and resistance at the outer bound of 1.3624. This is while the dominant downtrend since late May struggles to remain intact. The falling trend line from then is currently being tested and clearing resistance opens the door to reversing USD/SGD’s decline.

Something to keep in mind of is SGD’s close relationship to the US Dollar, and if the MAS steps in to stem significant weakness in the Singapore Dollar given their policy stance. For more updates on the Singapore Dollar, you can follow me on Twitter here at @ddubrovskyFX.

USD/SGD Daily Chart

USD/SGD May Reverse as Singapore Economy Contracts Most Since 2012

Chart Created in TradingView

Singapore Dollar Trading Resources

--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.