Singapore Dollar Rises Late as US Dollar Keeps Correcting
Singapore (Nov 19) The Singapore dollar gained against the U.S. dollar late Tuesday in Asia as the U.S. currency came under selling pressure because of expectations for a more accommodative U.S. monetary policy amid a shaky recovery.
The U.S. dollar was quoted at S$1.2437 in the last hour of Asian trade compared with S$1.2465 around the same time on Monday.
The ICE dollar index (DXY), a measure of the U.S. unit against six other currencies, eased to 80.725, down from 80.774 late Monday and off from 80.824 at the end of the previous week. The WSJ Dollar Index saw similar movement, inching down to 73.15 from 73.19.
The major theme driving markets remains the outlooks of the major central banks, according to a note by Credit Agricole. That view was echoed by many other analysts.
Recent data have signaled that the U.S. recovery is still not on firm ground, which would mean that the U.S. Federal Reserve will keep an easy monetary policy for longer, hurting the U.S. dollar's prospects.
Singapore government bonds rose in line with gains by U.S. Treasurys because of expectations that the Fed will keep buying government bonds longer to support the economy. The yield on the benchmark 10-year Singapore government bond fell 2 basis points to 2.28% while that on the two-year bond eased by a hundredth of a percentage point to 0.33%.