Singapore dollar stays near two-week low ahead of crucial data

Retail sales and trade data for January and final print for Q4 GDP are the data slated for this week.

Sigapore dollar
Singapore dollar Reuters

The Singapore dollar has held near a two-week low against the US currency on Monday (13 Feb) ahead of crucial data releases scheduled for the week including the final numbers for the fourth quarter GDP.

USD/SGD traded at 1.4207 at 4pm in Singapore, little changed from last Friday's close of 1.4212. The Singdollar had weakened nearly 1% against the greenback last week, moving off a 5-month high and ending near a 2-week low.

The USD index, the gauge that measure's the US currency's strength against a basket of major currencies in trade terms, was also barely moved from its previous close of 100.8.

Meanwhile, a suspicious central bank mid-point fixing versus Chinese yuan disrupted trading of the CNY-SGD pair on the day.

The People's Bank of China on Monday announced the yuan's midpoint as 4.9929 per Singapore dollar, far weaker than Friday's closing of 4.8418. The bank later reset it at 4.8391 and corrected the trading platform level accordingly.

Data week for Singapore

Singapore will release the December retail sales figures on Wednesday (15 Feb) and the forecast is for a 1% decline in the month-on-month rate from 0.5% growth in November. The year-on-year growth rate, however, is seen rising to 2.9% from 1%.

On Thursday, Statistics Singapore may confirm the preliminary growth numbers released on 3 January, according to which the island economy expanded 1.8% from a year earlier in the three months to December helped by a 9.1% sequential jump in the quarter.

The trade data for January, due for release on Friday, will also be a major event for this week. Analysts expect the trade surplus to narrow to $6.1 billion from $6.3 billion in December. The non-oil exports growth is seen plunging to 0.5% in year-on-year terms from 9.4% in November.

Next Week

Inflation and industrial output numbers for January will be the talking points next week. The market forecast for core inflation is for a rise to 1.4% from 1.2% and the headline rate to o.3% from 0.2%, both in year-on-year terms.

USD/SGD Technical Outlook

The USD/SGD pair is testing a key resistance inside the downtrending channel began in January and a break above this will find next barrier at 1.43275.

A move beyond that will significantly weaken the Singdollar off last week's 5-month high targeting levels as high as 1.44300 and 1.4567, the 3 January peak for the pair.

In case of a reversal, the pair will find support near 1.4150 initially and then 1.4053, the 3 February low. Further south, 1.39645 will be an important level where the pair will be supported within the January-began downward channel.