In September the Pound Sterling to Singapore Dollar (GBP/SGD) exchange rate fluctuated between highs of 2.1941 and lows of 2.1450 due to speculation surrounding the policy outlooks of the Bank of England (BoE) and Federal Reserve.
Sterling’s best result of the month came earlier this week thanks to comments by Bank of England (BoE) Deputy Governor Sir Jon Cunliffe, who advocated that the next BoE Monetary Policy Committee (MPC) interest rate move should be a rise, owing to the UK economy currently being ‘pretty strong’.
Singapore’s biggest news of the month so far has been the General Election on September 11
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. The victory for the People’s Action Party (PAP) could only be classified as a landslide, with the PAP taking over 69% of the vote against the 12.5% claimed by the Worker’s Party of Singapore (WP), their closest rivals. Elected as Prime Minister from the PAP was Lee Loong, one of the sons of Lee Kew, Singapore’s first prime minister.
In the coming month, Pound Sterling/Singapore Dollar exchange rate movement may occur as a result of the US FOMC Minutes out on October 8
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along with the FOMC’s Interest Rate Decision on October 28
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, the BoE Interest Rate Decision on October 8
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, the UK Inflation Rate figures on October 13
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and the Singaporean Q3 GDP estimate, due for release on October 14
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.
The FOMC decision will likely have the largest influence on the pairing, just as it has this month. At the time of writing, no change from the current rate of 0.25% was predicted, but given that Fed policymakers like Fed Bank of Atlanta President Dennis Lockhart are pushing for a rate rise before the end of the year, confidence in a rate hike as early as October could swell to the point of pushing SGD/GBP up as the 28
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approaches. The earlier-released minutes are likely to be key indicators of FOMC sentiment, therefore major movement could also occur on October 8
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.
The BoE interest decision is also forecast for no change, although, the minutes could reveal potential dissent for a rate hike among policymakers. The UK inflation results will be of particular interest to speculators, as the last BoE minutes predicted the rate staying close to or at 0% until the end of the year, so any rises may trigger a rally while dipping into a negative figure is likely to demolish built up confidence in the Pound.
The Singaporean quarterly GDP estimate has been forecast optimistically, with a rise from -4% to 2.08% being predicted.