The USD/SGD currency pair held ground above a 2-week low of 1.2605 on Thursday, as stronger-than-expected US labor data prompted investors to pare back expectations of near-term Federal Reserve rate cuts.
The US economy added 130,000 jobs in January, a figure that topped expectations of 70,000, following a revised 48,000 job growth in December.
And, the US unemployment rate fell to 4.3% in January from 4.4%.
As a result, markets are now pricing in a 95% chance that the Fed will hold rates steady in March, compared to an 80% chance before data release.
Federal Reserve officials have urged caution on rate cuts. Cleveland Fed President Beth Hammack said the labor market is moving toward balance. She stressed the need to bring inflation back to the 2% target. Moreover, she noted that policy sits near neutral and supports keeping rates steady.
Kansas City Fed President Jeffrey Schmid warned against cutting rates too quickly. He argued that further easing could allow inflation to stay high for longer.
Yet, investors still expect two 25 basis point rate cuts later this year, with the first likely in June.
Markets now turn to US inflation figures, due out on Friday, which could provide clearer signals about the Fed’s next policy move.
Meanwhile, in Singapore, final data showed the economy had expanded 6.9% year-on-year in Q4, accelerating from 4.6% YoY in the preceding quarter and also exceeding the flash estimate of 5.7%.
Taking into account the entire 2025, Singapore’s GDP grew 5%, easing from a 5.3% expansion in 2024, but topping the Ministry of Trade and Industry’s estimate of 4.8%.
The MTI has now revised up its 2026 GDP growth forecast to 2%-4% from 1%-3% previously.
The USD/SGD currency pair was last little changed on the day to trade at 1.2610.
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