Consumer Prices Rise In Singapore For Second Month, SGD Loses Ground

The Singapore dollar strengthened in the New York session following optimistic economic data and equity benchmark advances. The underlying currency strengthened to 1.5121, even testing right above the 1.5100 figure during the New York hours. Helping to boost SGD bullishness was the second consecutive monthly gain in inflationary pressures. Although most economies are likely to be concerned with interest rates being hiked, the recent consumer price acceleration only confirms that the Monetary Authority of Singapore will continue to keep the current policy in tact. Currently, the central body maintains its modest appreciation stance, allowing the underlying currency to strengthen in order to quell domestic inflationary pressures. For the record, consumer prices rose 0.7 percent on the year on year comparison according to the Department of Statistics. With rising employment and increased wages, consumer prices were notably supported by food prices. During the month, the subcomponent which makes up 23 percent of the index, rose 1.7 percent in the month. The figure continues the 2.7 percent pace seen in February and counters the 1.5 percent drop in transport and communication cost sub components. Incidentally, the rise helped to fuel stock gains as investors looked to the figure as representative of continued economic growth. Stocks advanced for the second session with SMRT Corp. leading gainers. The country’s largest subway operator surged on rampant rumors that the company had plans to merge with rival operator Comfort Delgro Corp. As a result, shares of SMRT jumped 11 cents to close at S$1.88. Subsequently, with advancers outweighing decliners on the day, Singapore’s Straits Times Index advanced by 27.81 points to close at 3,388.48, higher by 0.8 percent.