The Singapore dollar was the dominant currency in the pair while the pound sterling was trying to regain grounds. The quotes of the pair reached 1.7120 support area.
The Bank of England is still on its tightening bias towards a rate cut. The ultimate inflation target set by the BOE is 2%. Ministry of Trade & Industry estimated the Singapore economy expanded by 1.3% on a year-ago basis in Q1 2019, following the 1.9% growth in Q4 2018. Moreover, GDP growth of the UK was seen to be lower than expected indicating a weaker economic growth due to the global growth and ongoing Brexit uncertainties. CPI Inflation was 2% in May with Core CPI at 1.7%. The labor market remains tight in Q2 in line with expectations. The British currency weakened ahead of the BOE's interest rate decision and the release of the second reading of Q1 GDP growth rate.
The Singapore economy has slowed from the beginning of 2019. It is likely to expand at a modest pace in the coming quarters. Core inflation has become lower than expected due to weaker global oil prices and a stronger impact from the liberalization of the retail electricity market. Consequently, MAS is downgrading its growth forecast for MAS Core Inflation to 1–2%. The GDP growth is expected to come in slightly below the mid-point of the 1.5–3.5% forecast range in 2019. The labor market conditions remain firm and will support moderate wage increases. The unemployment rate for the Q1 kept unchanged at 2.2%. Private road transport costs are projected to be unchanged from while accommodation costs are likely to decline at a slower pace this year. Additionally, the industrial Production on monthly basis dropped to -0.7% from the previous value 2.1% and on a yearly basis, the value slid to 0.1% from -2.4%. The Consumer Price Index increased from 0.8 to 0.9 on an yearly basis. The Purchasing Managers Index is pending next week. The previous value was 49.9.
The Singapore dollar is expected to sustain gains over GBP but certain correction and volatility may occur after the G20 summit.
Now let us look at the technical view. The price is currently residing at the support area of 1.7120. It is expected to counter for certain retracement towards the dynamic level of 20 EMA as pullback and continue pushing lower towards 0.70 area with a daily close. As the price remains below 0.7200 area, the bearish bias is expected to continue.