The USD/SGD currency pair extended a pullback from a fresh 6-week high of 1.3505 on Tuesday, after data showed a strong rebound in Singapore’s industrial production in February, while investors were also eyeing Friday’s report on US PCE inflation that could shape Fed rate cut expectations.
Industrial output in Singapore grew at a monthly rate of 14.2% in February, while rebounding strongly from a revised up 6.7% drop in January. It has been the sharpest monthly increase since February 2022.
In annual terms, industrial production rose 3.8% in February after a revised down 0.6% growth in January.
With this week relatively light on macro data, investor focus now sets on the Federal Reserve’s preferred inflation gauge. The US core Personal Consumption Expenditures (PCE) Price Index is expected to have risen 0.3% month-over-month in February, and at an annual rate of 2.8%.
“The Fed Chair has tried to push the market away from aggressive interest rate expectations at the start of this year and he’s always been maintaining the idea that it was going to be a bumpy path,” Tony Sycamore, market analyst at IG, was quoted as saying by Reuters.
“But a print of 3% (annually) or greater would certainly create a lot of concern that maybe the bumpy path is going to be bumpier than expected.”
Currency Pair Performance
As of 8:04 GMT on Tuesday the USD/SGD currency pair was edging down 0.10% to trade at 1.3444.
Yesterday the exotic Forex pair went up as high as 1.3505. The latter has been the pair’s strongest level since February 14th (1.3517).
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