The USD/SGD currency pair settled below recent high of 1.2991, its strongest level since November 26th 2025, as the latest US PCE inflation and GDP data reinforced expectations of multiple Federal Reserve rate hikes this year.
According to the US Bureau of Economic Analysis, the headline US Personal Consumption Expenditures (PCE) Price Index rose 4.1% year-over-year in May, up from 3.3% previously and well above the Fed’s 2% target.
The core PCE index, the Fed’s preferred inflation gauge, increased 3.4% year-over-year in May, compared with 3.3% in the prior month and in line with expectations. This marked the highest level since October 2023. In a separate release, US Gross Domestic Product was reported to have grown at an annualized 2.1% in the first quarter, surpassing both market consensus and the previous estimate of 1.6%.
These data points have bolstered expectations that the Fed will continue to raise interest rates. Markets are currently anticipating three rate hikes this year and are assigning about a 63.4% probability to a September increase, based on the CME FedWatch Tool.
The exotic Forex pair gained 0.26% for the week.
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