The USD/SGD currency pair settled below Friday’s high of 1.2899, its strongest level since December 22nd, as the latest US macro data seemed to have curbed expectations for imminent interest rate cuts by the Federal Reserve.
Initial claims for unemployment benefits in the US fell by 9,000 to the seasonally adjusted 198,000 for the week ended January 10. The figure was below market consensus of 215,000 and also came in below the prior week’s level of 207,000.
The stronger-than-expected labor market report has reinforced the view that the Federal Reserve is likely to keep interest rates on hold over the coming months. Analysts at Morgan Stanley have shifted their anticipated timing of Fed rate cuts to June and September, from earlier expectations of January and April.
Still, political uncertainty around the Federal Reserve could limit US Dollar upside.
US President Donald Trump said on Wednesday that he had no current plans to dismiss Fed Chair Jerome Powell despite the Justice Department’s criminal investigation into Powell, while adding that it was “too early” to determine his ultimate decision.
Federal prosecutors threatened to indict the Fed Chair over his congressional testimony on a Fed building renovation project. Powell said this was a “pretext” intended to mount more pressure on the US central bank to cut interest rates.
Meanwhile, Singapore’s non-oil domestic exports were reported to have risen 6.1% year-on-year in December, following a revised down 11.5% surge in November.
Non-electronic exports rose 0.8% YoY in December, while electronic exports grew 24.9% YoY.
The exotic Forex pair gained 0.12% for the week.
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