USD/SGD dips more as US-China relations improve

The minor pair dipped for the eleventh consecutive day, on the back of improved US-China trade sentiment and steady US interest rates.

The USD/SGD pair continues to be bearish, as it falls for the eleventh straight day.

The currency traded 0.09% lower overnight – its sharpest decline across this time period – to open at S$1.35721 this morning from the previous close of S$1.35643, according to IG data.

The pair has broken past its previous resistance zone of S$1.35836, but not before a short-lived rally on Wednesday 11 December that managed to take it north of the 1.36 mark.

This downward trend succeeds the bullishness that was enjoyed for two weeks in late-November.

Year-on-year, the minor is down around seven percent.

Improved trade sentiment; steady interest rates

IG Asia Market Strategist Jingyi Pan said the greenback is weakening because of an improvement in US-China trade sentiment, coupled with the US Federal Reserve’s latest forecast for steady interest rates through until at least end-2020.

On Thursday 12 December, China’s Ministry of Commerce said the economic and trade teams of both countries are in ‘close communication’ regarding a trade agreement.

Fed officials also voted unanimously during Wednesday’s Federal Open Market Committee to keep interest rates at the current range of 1.5% to 1.75% until the end of 2020.

Next phase of movement

It appears that the USD/SGD could possibly dip further, with analysts like JP Morgan Chase & Co.’s Jamie Dimon saying that ‘there will be a phase-one deal’ between the world’s two biggest economies.

‘It will be a negative in the marketplace and a small-negative’ for the US and global economy, he said. ‘People expect this phase-one deal to take place and tariffs not to go up.’

As Pan noted, ‘any re-escalation of the tariffs war or the carrying forth of the trade war to other fronts, would jeopardise Asia markets’ performance’, including forex.

Much of the greenback’s performance in the coming months, and the wider forex market, is increasingly hanging on one date: December 15.

The pair is currently trading on IG at S$1.35644.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.