Pound Sterling Singapore Dollar (GBP/SGD) Exchange Rate Rises as Singapore Retail Sales Disappoint
The Pound Sterling Singapore Dollar (GBP/SGD) exchange rate edged higher, leaving the pairing trading at around S$1.7886.
The Singapore Dollar remained under pressure today after data revealed that retail sales continued to weaken at the start of 2020.
Department of Statistics data revealed annual sales slumped by a further -5.3%, deepening from December’s -3.4% decline.
This was the 12th consecutive month of decline, and the largest monthly fall since June 2019, dampening SGD sentiment.
BoE’s Bailey Buoys the Pound (GBP)
Sterling edged higher on Thursday after the Bank of England’s (BoE) incoming Governor, Andrew Bailey stated action could be needed to help fight the effects of Covid-19.
Following the US Federal Reserve’s emergency interest rate cut, expectations increased that the BoE would follow suit.
However, the next Governor of the bank said that any measures should be done in tandem with the country’s government.
This sent expectations of the BoE following the Fed and cutting rates lower, and provided GBP with some support.
Commenting on this, Rabobank senior FX strategist, Jane Foley said:
‘There were rumours earlier on that the BoE could cut rates today, but that hasn’t happened. That has been an element [in the moves].’
Although gains were limited as markets still expect the bank to cut rates by 25 basis points by its next meeting in March. According to head of G10 currency strategy at CIBC Capital Markets, Jeremy Stretch:
‘Certainly the market is priced for a 25 bps cut at the March meeting, so the market is anticipating the BoE will use up its arsenal.’
Pound Singapore Dollar Outlook: BoE’s Mark Carney in Focus
Looking ahead, the Pound (GBP) make further gains against the Singapore Dollar (SGD) following a speech from the Bank of England’s (BoE) outgoing Governor, Mark Carney.
If Carney echoes incoming Governor, Andrew Bailey’s speech, causing expectations of an immediate rate cut to decrease, Sterling will rise and the Pound Singapore Dollar (GBP/SGD) exchange rate will extend today’s gains.