In November, Singapore’s industrial production fell sharply to -10.2%, down from 11.5% in October. This significant drop indicates difficulties in the manufacturing sector, likely due to global economic challenges, which may affect Singapore’s economic future.

Market Overview

Recent updates highlighted that the USD/CAD is near five-month lows because of differences in Bank of Canada and Federal Reserve policies. Gold prices have also retreated from their highs as investors took profits. The Pound Sterling has slightly declined amid quiet holiday trading, while the S&P 500 is expected to grow by 2026. Other key points include the EUR/USD stabilizing below 1.1800, and GBP/USD lingering around 1.3500 in calm markets. Gold traded below $4,500, while Bitcoin dropped under $87,000 due to increased ETF outflows and reduced activity from major investors. The economic outlook for 2026-2027 appears stable for advanced nations, although Avalanche is struggling near $12 due to Grayscale’s ETF updates. FXStreet reminds us that all investment risks lie with individual investors, and the accuracy of information is not guaranteed. The article presents the authors’ perspectives, independent from FXStreet’s official views. As of December 26, 2025, we need to address Singapore’s industrial production, which plummeted to -10.2% in November after an impressive growth of 11.5% in October. This sudden downturn reveals a serious decline in the manufacturing sector and is a negative sign for the Singapore Dollar. The instability hints that global demand, critical for Singapore’s economy, may be weakening as we approach the new year. This negative trend is echoed by new data showing a surprising 12% year-over-year drop in Singapore’s non-oil domestic exports (NODX) for November, particularly in electronics. Additionally, China’s Caixin Manufacturing PMI for November fell to 49.5, indicating contraction and adding to worries about a regional slowdown. Together, these elements paint a tough picture for Singapore’s export-driven economy.

Strategic Approach

We’ve seen drastic changes in industrial production before, especially during the supply chain disruptions of 2022 and 2023, but the speed of this recent reversal is concerning. Going from strong growth to a deep decline in just one month suggests earlier optimism was misguided. This is a clear signal to prepare for potential further declines in Singapore-related assets. For derivatives traders, this is a chance to position for a weaker Singapore Dollar in the upcoming weeks. We recommend purchasing call options on the USD/SGD currency pair, as this allows for potential gains if the SGD weakens further against the US dollar. This strategy provides a way to take advantage of the negative economic outlook with defined risks. On the equity side, the Straits Times Index (STI) is likely to see downward pressure, especially in manufacturing and industrial sectors. Buying put options on an STI-tracking ETF could be a good way to profit from a potential market decline. This strategy can hedge existing long positions or be a speculative bet against the market. It’s important to remember that we’re trading in holiday-thinned markets, which can lead to lower liquidity and exaggerated price changes. Managing risk is essential; using smaller position sizes than usual can help protect against sudden market swings that often happen during the last trading week of the year. Create your live VT Markets account and start trading now.

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