In September, Singapore’s industrial production soared by 26.3% compared to the previous month, far surpassing the expected 8.6%. This indicates strong growth in the manufacturing sector during this time. In the UK, retail sales surprisingly increased by 0.5% in September, while a decline of 0.2% was anticipated. This positive news has boosted the Pound Sterling, leading investors to shift their attention to upcoming PMI and US CPI reports.

Currency Trends

The USD/INR dropped, as the Indian Rupee remained strong despite a slowdown in India’s flash PMI growth. On the other hand, USD/CAD rose above 1.4000, driven by a positive market trend. Gold prices experienced fluctuations, hovering around $4,100 early on Friday, influenced by geopolitical tensions. The rising US Dollar and Treasury yields played a role in this volatility. Chainlink’s price stayed above $17 after a 2% recovery, helped by the buyback of 63,481 LINK tokens. However, retail interest in Chainlink remains low, affecting its position in the market. In Japan, the appointment of Sanae Takaichi as Prime Minister has also shaped perceptions of the Yen.

Singapore’s Economic Surge

Last month, Singapore’s industrial production report for September was a significant surprise, showing 26.3% growth. This figure far exceeded the forecast of 8.6%, indicating a remarkable boost in the manufacturing sector. It suggests that the regional economy is performing better than expected. This strong performance is not an isolated incident. Advance GDP estimates for Q3 revealed a growth rate of 3.5%, which was also above forecasts. The Monetary Authority of Singapore (MAS) recognized this in its October policy review, keeping a tightening stance on currency, which is beneficial for the Singapore Dollar. The Singapore Dollar has strengthened recently, moving from around 1.38 to 1.35 against the US Dollar. Traders might want to consider buying call options on the SGD to benefit from further gains while limiting potential losses if the trend changes. This economic strength is also a positive sign for Singaporean stocks, particularly in the electronics and manufacturing sectors. Investing in Straits Times Index (STI) futures or call options could be an effective way to take advantage of this economic performance. Strong domestic data, along with a recovering global semiconductor cycle as seen in 2024, typically leads to a rally in the index. The impacts extend to commodities, as Singapore’s status as a major trading hub implies higher demand for energy and industrial metals. Still, the main concern lies with global factors, particularly the upcoming US inflation data. If the US CPI is higher than expected, it could strengthen the US Dollar globally and reduce the regional economic strength. Create your live VT Markets account and start trading now.

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