The USD/SGD price declined today as forex traders digested the relatively strong economic numbers from Singapore. The pair dropped to an intraday low of 1.3220, the lowest level since January 22.
Singapore strong economic recovery
The Singaporean economy continued to recover in the fourth quarter helped by robust international demand and personal consumption.
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According to the country’s statistics office, the economy expanded by 15.9% in the fourth quarter, an improvement from the previous expansion of 8.7%. This growth led to an annual decline of 2.4%, better than the previous quarter’s decline of 3.8%.
In total, the country’s economy contracted by 5.4%, better than the expected contraction of 5.8%. The government was expecting the economy to contract by between 6% and 6.5%. That was the worst contraction of the country’s economy since 2001.
Still, the government expects the economy to continue recovering this year helped by strong international demand.
Later this week, the USD/SGD price will react to the latest trade numbers from Singapore that will come out on Wednesday. Economists polled by Reuters expect the data to show that the country’s non-oil exports rose by 5.8% in January after rising by 6.80% in the previous month. They also see the non-oil imports rising by 2.0%.
Meanwhile, the overall performance of the US dollar will have an impact on the USD/SGD price. The greenback has been pressured by the rising US debt and the relatively weak economic numbers. For example, the recent inflation and employment numbers disappointed, putting more pressure on the Biden administration to offer more stimulus.
This week, the USD will react to the latest housing starts, building permits, retail sales, manufacturing and industrial production, and PPI numbers.
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USD/SGD technical outlook
The USD/SGD pair is trading at the lowest level since January this year. Last week, the pair broke-out below the ascending channel shown in black. On the four-hour chart, it is still below the 25-day and 15-day exponential moving averages. The Stochastic oscillator has also moved below the oversold level. Therefore, the pair may continue falling as bears target the next support at 1.3200.