During Friday’s trading session USD/SGD traded within the range of 1.2404-1.2430 and closed at 1.2410, losing 0.03% for the day and 0.39% on a weekly basis.
Singaporean preliminary Gross Domestic Product (GDP) probably expanded 2.5% during the second quarter of the year compared to the first quarter, according to the median forecast by experts. In Q1 2014 compared to Q4 2013 nations GDP grew at a pace of 2.3%. The preliminary GDP estimate for the second quarter of the year is calculated mainly from data regarding the first two months of the quarter (April and May). It is an early indication of nations GDP growth during Q2 and may be revised when more comprehensive data become available.
The GDP represents the total monetary value of all goods and services produced by one nation over a specific period of time. What is more, it is the broadest indicator of a countrys economic activity. The report on GDP holds a lot of weight for traders, operating in the Foreign Exchange Market. It serves as evidence of growth in a productive economy, or as evidence of contraction in an unproductive one. As a result, currency traders will look for higher rates of growth as a sign that interest rates will follow the same direction. Higher interest rates will attract more investors, willing to purchase assets in the country, while, at the same time, this will increase demand for the national currency. If an economy is experiencing a robust rate of growth, the benefits will eventually affect the end consumer, because of the increased likelihood of spending, while through increased consumer expenditures economy has the potential to expand even further. Therefore, in case Singapores growth outpaced expectations, this would heighten the appeal of Singaporean dollar.
The Ministry of Trade and Industry (MTI) will release the official GDP report at 0:00 GMT on Monday (July 14th).
According to Binary Tribune’s daily analysis, in case USD/SGD manages to breach the first resistance level at 1.2425, it will probably continue up to test 1.2441. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2451.
If USD/SGD manages to breach the first key support at 1.2399, it will probably continue to slide and test 1.2389. With this second key support broken, the movement to the downside will probably continue to 1.2373.