The USD/SGD pair dropped today, fuelled by a weaker dollar and the strong industrial production data from Singapore. The pair is trading at 1.3282, which is the lowest it has been since Monday this week.
Singapore industrial sector accelerates
Singapore industrial sector is firing on all cylinders, according to the latest data by the country’s bureau of statistics. In November, industrial production rose by 17.9%, a sharp rebound from the October’s contraction of 19.0%.
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This increase was better than the overall estimates of a 15.4% increase. Also, it led to an annualised increase of 7.2%, faster than the expected 5.0%.
The country’s industrial production was driven by a 40.6% increase in biomedical sector, 34.9% increase in electronics, a 10.1% jump in chemicals, and a 7.3% increase in precision engineering. The main laggards were general manufacturing and transport engineering declined by 13.2% and 29.5%, respectively.
Further data showed that manufacturers were generally optimistic about the next few months. All but chemicals and electronics expect the business activity to be robust until March. This optimism is mostly because of the new vaccines and hopes of a continued recovery.
Meanwhile, the USD/SGD is dropping because of the overall weaker economic numbers from the United States. Data released yesterday showed that more than 800k Americans filed for initial jobless claims last week. Other numbers showed that durable goods orders, personal income and spending, and housing sales tumbled in November.
USD/SGD technical outlook
Singapore dollar has been in a strong downward trend since March this year. The USD/SGD has dropped by more than 9% during this period. Today, it is below the shorter-, medium-, and longer-term moving averages while the Relative Strength Index (RSI) has continued to decline.
Therefore, the pair will possibly continue falling, with the next key target being at 1.3230. However, a move above 1.3350 will invalidate this trend. You can learn more about technical analysis in our free forex courses.