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Currency Market Analysis

Oct 13, 2017 | Currency Market Analysis

Global Themes

USDSGD rebounds despite strong GDP, upbeat MAS

The USDSGD has started this morning’s session higher despite a stronger local GDP number and a more upbeat statement from the Monetary Authority of Singapore.

Singapore’s annual GDP came in at 4.6% in a much better result than the expectations of 3.8%.

From the MAS, the central bank continues to say it will maintain current settings – with the rate of appreciation at zero – but the MAS no longer says these setting will stay for “an extended period”.

However, while the MAS sounded slightly more upbeat, the central bank expects no rise in inflation in 2018.

Draghi points to low rates

The USD was helped by better data overnight.

Overnight, US producer prices (excluding food and energy) were reported up 2.2% in annual terms, above forecasts for 2.0%.

The euro was the other big mover overnight.

The euro fell after a European Central Bank president Mario Draghi spoke at the Peterson Institute for International Economics in Washington DC overnight.

Draghi indicated that as the ECB’s money printing program ends, interest rates will stay at record lows.

Chinese trade, US inflation

In today’s session, the market will be looking to Chinese trade balance numbers, due around 11.00am.

Overnight, all eyes will be on US inflation numbers. Excluding food and energy, the market is looking for an annual rate of 1.8%.

A higher number could boost the US dollar.

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