Pound Sterling to Singapore Dollar (GBP/SGD) Exchange Rate Trending within a Limited Range as UK Sales Better Estimates

In response to positive British sales data, the Pound edged higher versus many of its currency competitors. The appreciation has been somewhat sluggish, however, thanks to anxieties regarding the 2017 European Union referendum.

The Confederation of British Industry's Reported Sales eclipsed the median market forecast of a jump from 12 to 20 in May, with the actual data reaching 51. This caused predictions for June’s reported sales to hit a 27-year high. Rain Newton-Smith, CBI Director of Economics said; ‘Retailers will be encouraged to see growth in sales and orders on the high street bounding ahead. Low inflation, which we expect to remain below 1% for the rest of the year, has given household incomes a much-needed boost and greater spending power. Overall the outlook is bright for firms on the high street, but challenges still remain, especially for food retailers, who are still feeling the heat of stiff price competition from new entrants to the sector. And investment plans have also taken a hit.’

The Sterling appreciation was slowed, however, by news that Germany and France intend to tighten their relationship within the rules of the Lisbon treaty. Given that British Prime Minister David Cameron intends on reforming the treaty, the new developments in neighbouring countries will make achieving the desired concessions extremely difficult. Should he fail to deliver a more desirable relationship with the EU for the British people, Cameron has admitted that he would champion an exit.
The Singapore Dollar, meanwhile, ticked higher versus many of its closest currency rivals after registering mixed domestic data results. On the year, the final figure for 1st-quarter Gross Domestic Product came in at 2.6%; bettering the market consensus of 2.1% growth. On a quarterly basis, GDP increased by 3.2% in the first quarter; completely eclipsing the median market forecast of 1.1%. However, April’s Industrial Production declined by -8.7% on the year and by -5.8%on the month.

Having seen better-than-expected growth, Singapore’s central bank is likely to refrain from easing policy. ‘There isn’t a great impetus for easing,’ said Vishnu Varathan, a Singapore-based economist at Mizuho Bank Ltd. ‘Things look slightly more upbeat. Oil prices are stabilizing higher and so I think the Monetary Authority of Singapore (MAS) will retain policy where it is, without further easing, unless we see a fresh and unexpected negative shock.’
During Tuesday’s European session, the Pound Sterling to Singapore Dollar (GBP/SGD) exchange rate was trending in a tight range at a rate of around 2.0740.