Over the past month, the Pound Sterling to Singapore Dollar (GBP/SGD) exchange rate was trending within the range of 2.0558 to 2.1140.
The Singapore Dollar has a close trading relationship with the US Dollar, as evidenced by the Industrial and Commercial Bank of China (ICBC), which has now introduced a dual currency credit card. Although domestic data does impact on the Singapore Dollar, most movement can be linked to tracking ‘Greenback’ (USD) volatility. A generally weaker US Dollar over the past month, after futures traders delayed bets as to the timing of a Federal Reserve benchmark rate hike, has seen the Singapore Dollar soften versus many of its peers despite producing mostly positive domestic data. Over the past month Singapore’s Manufacturing, Foreign Exchange Reserves, Unemployment Rate and Retail Sales reports all improved upon previous figures.
On Wednesday June 17
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the Singapore Dollar declined versus most of its competitors after domestic data produced mostly negative results. May’s Trade Balance saw the surplus climb from 5874 million to 6608 million but miss the median market forecast 7262 million. Non-Oil Exports declined on both an annual and monthly basis is May. Adding to Singapore Dollar headwinds is a weaker US Dollar as traders await the Federal Open Market Committee (FOMC) meeting. The Fed policy outlook will have a significant impact on the Singapore Dollar. Should the Fed act dovishly, as many analysts have predicted, the Singapore asset will dive versus its peers.
The Pound Sterling to Singapore Dollar (GBP/SGD) exchange rate rallied by around 0.78% on Wednesday morning. This is partly due to the weak data and soft US Dollar explained above, but is also in response to positive labour market data out of the UK.
Looking ahead, there will be several influential ecostats with the potential to provoke Singapore Dollar volatility. Tuesday June 23
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will be of significance with Singapore’s Inflation figures due for publication- local policymakers will be hoping for a move away from deflation. On the month, May’s Inflation Rate is predicted to rise from -0.6% to -0.07%. Industrial Production, Bank Lending and the Manufacturing PMI will also be of interest to those invested in the Singapore Dollar.
However, as explained above, those invested in the Singapore Dollar will want to focus on key data releases from the US as well. The FOMC decision will be of importance, but Thursday’s inflation data will also have a significant impact on the Singapore asset. June 24
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will see the final figure for first-quarter US Gross Domestic Product and Consumer Confidence data. Also; Employment Change, ISM Manufacturing PMI, Unemployment Rate, Non Farm Payrolls and ISM Non-Manufacturing will have an impact in the early stages of July.