The Singapore Dollar fell beyond its recent 4 ½ year low against the US Dollar last week as demand for several Asian currencies dropped following the publication of upbeat US jobs data.
As the slide in the level of US unemployment, from 5.7% to 5.5%, makes it increasingly likely that US borrowing costs will be increased this summer, investors ditched higher-risk and emerging-market assets before the weekend.
The US Dollar to Singapore Dollar exchange rate began last week trading in the region of 1.3656 but ended Friday’s session at 1.3711 thanks to the 295,000 jump in US payrolls.
The employment figures were part of the reason for the uptrend in the USD/SGD pairing, but domestic developments also took a toll on Singapore Dollar trading.
Last Tuesday, for example, the SIPMM Manufacturing PMI put the Singapore Dollar under pressure by falling from 49.9 to 49.7 in February. A more positive reading of 50.66 had been hoped for.
The index has now remained in the below-50 contraction zone for several months, and the key electronics index showed its first fall for over two years.
Economic reports for Singapore are in short supply for much of this week, but there are two influential ecostats to be aware of on Friday.
Singapore will be releasing unemployment data for the fourth quarter of 2014 at 02:30 GMT.
Economists have forecast that the level of joblessness in the nation eased from 2.0% in the third quarter to 1.9% in the three months through December – a result which would be Singapore Dollar supportive.
The jobs data will be followed by Singapore’s retail sales report for January at 05:00 GMT.
Economists are anticipating a monthly sales slide of -0.49% in January after the steep -2.0% drop recorded in December. This would take the annual figure from 2.6% to 0.77%.
This week’s influential US Advance Retail Sales data and University of Michigan Confidence Index may also exacerbate the SGD/USD downtrend as both reports are expected to show improvement.
A 0.4% increase in sales is forecast for February. This would follow the -0.8% drop recorded in January.
Meanwhile, economists have projected that the University of Michigan sentiment measure advanced from 95.4 to 95.7.
The following week sees the publication of Singapore’s trade balance stats for February.
During the European session the US Dollar to Singapore Dollar (USD/SGD) exchange rate was trading in the region of 1.3858, up from the day’s low of 1.3792.
The Pound Sterling to Singapore Dollar (GBP/SGD) exchange rate was trading in the region of 2.0893