By Samir Al Khoury,
The latest Singaporean economic data indicates that the Singaporean economy is indeed resilient, as:
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The manufacturing PMI rose in July to 50.7, surpassing the previous reading of 50.4.
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The non-oil exports index increased in July by 12.20%, exceeding expectations of 1.90% and the previous reading of -0.40%, reaching its highest level since March 2023.
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The Singapore Foreign Exchange Index rose in July to $378.6 billion, surpassing the previous reading of $371.1 billion, marking its highest level since March 2022.
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The unemployment rate fell to 2.0% in July, down from the previous reading of 2.1%.
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The industrial production index increased on a monthly basis in July by 10.1%, outperforming expectations of 5.3% and the previous reading of -4.3%.
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The trade balance index rose in July, recording S$6.486 billion, higher than the previous reading of $3.060 billion.
An important factor contributing to the downward momentum of the US dollar against the Singapore dollar is the slowdown in the US economy and statements from most Federal Reserve members, including Chairman Jerome Powell, indicating that they will begin monetary easing by reducing interest rates starting from the September meeting. Additionally, market expectations suggest a 100 basis point cut in US interest rates this year.
The US dollar fell against the Singapore dollar to 1.3000 on Monday, 26 August 2024, marking its lowest level in 10 years, specifically since 28 November 2014. The pair is currently trading around the 1.3000 level, which appears to be a stubborn support level that it has not been able to break during the previous five sessions.
On the technical side, if the pivot point at 1.3024 is broken for the USD/SGD pair, it may target support levels at 1.3005, 1.2983, and 1.2964. Conversely, if it exceeds the pivot point, it will likely target resistance levels at 1.3046, 1.3065, and 1.3087. The Relative Strength Index (RSI), currently at 33 points, indicates negative momentum for the USD/SGD pair.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.
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