(Bloomberg) — Singapore’s currency looks set to remain under pressure as global headwinds outweigh the benefits of an easing in the nationwide lockdown.
The U.S. dollar-Singapore dollar pair has failed to break below technical support at its one-month low, suggesting its next move could well be higher. Data this week is expected to show the nation’s economy contracted 1.8% y/y in the first quarter, according to the median estimate of economists in a Bloomberg survey.
The Southeast Asian currency has been pressured by the negative impact of the coronavirus on the Singaporean economy and is down over 5% against the greenback so far this year. The government is projecting gross domestic product will shrink 1%-4% in 2020.
“We see significant challenges ahead for the Singapore dollar, given Singapore is one of the most open economies in the region,” said Standard Chartered Plc. strategist Divya Devesh. “Given the subdued outlook for global growth and global trade, and a sharp decline in global manufacturing PMI’s, we expect the recent improvement in Singapore’s non-oil domestic exports to reverse course.”
The nation’s exports unexpectedly climbed for a second straight month in April, mainly due to a jump in pharmaceuticals, according to data released on May 18. The government said the shipments tend to be volatile and fluctuate across months.
Also keeping the local dollar under pressure is the willingness signaled by the Monetary Authority of Singapore to let the currency weaken at its March 30 policy decision, in a bid to support the trade-reliant economy. The MAS doesn’t set rates, but instead manages the currency against major trading partners as a policy tool.
The Singapore dollar’s nominal effective exchange rate — the focus of the MAS — began May at a similar level to where it was at the time of the March policy decision, suggesting there is still room for the currency to weaken further.
The U.S. dollar-Singapore dollar pair traded at 1.4222 on Friday at 5:20 p.m. local time, more than 1% above its April 30 low of 1.4070. Its failure to breach this support leaves the door open for a grind higher toward technical resistance at the April 6 high of 1.4417.
Still, pressure on the currency should be alleviated somewhat as the domestic economy starts to pick up with Singapore allowing more businesses to reopen on June 2. That will increase the active proportion of the economy to three-quarters — after a nationwide lockdown cut transmission of the coronavirus among citizens and permanent residents.
Below are the key Asian economic data and events due this week:
Monday, May 25: No major economic releases
Tuesday, May 26: Singapore industrial production, CPI and 1Q GDP, New Zealand trade balance, Japan all industry activity index, South Korea consumer confidence
Wednesday, May 27: Australia 1Q construction work done, RBNZ’s financial stability report and press conference, China industrial profits, South Korea manufacturing/non-manufacturing business surveys
Thursday, May 28: Australia 1Q private capex, New Zealand business confidence, Bank of Korea rate decision
Friday, May 29: India 1Q GDP, Australia private sector credit, New Zealand consumer confidence, Japan retail sales, industrial production, jobless rate, consumer confidence and Tokyo CPI, South Korea industrial production, Thailand trade balance and BoP current account balance
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
