WSJ: Singapore Dollar Pushes New Highs Late As Risk Appetite Returns
("Singapore Dollar Pushes New Highs Late As Risk Appetite Returns," at 0806 GMT, misidentified the rating agency that downgraded Portugal's sovereign debt in the 6th paragraph. The correct version follows:)
SINGAPORE (Dow Jones)--The Singapore dollar hit a new record high against its U.S. counterpart Friday, as the market seemed to turn its attention away from risk associated with Japan's nuclear crisis and toward the Monetary Authority of Singapore's April policy-setting meeting.
The U.S. dollar fetched S$1.2597 late in Asian trading day, after hitting a record low of S$1.2593. It was trading at $1.2638 late Thursday.
The Singapore dollar's rise has been mostly steady since the beginning of the year, hitting some turbulence in the immediate aftermath of the Japan earthquake when the U.S. dollar rose as high as S$1.2874.
Trading activity seems to be returning to normal, said a strategist at a foreign bank. "Everyone is back to speculating about a strong policy response" to inflationary pressures from MAS when its policy board meets in mid-April.
The MAS is widely expected to tighten policy to combat inflation, though some analysts have moderated their forecasts given new concerns about the earthquake's impact on regional growth.
Elsewhere, markets shrugged off Standard & Poor's ratings service's downgrade of Portuguese sovereign debt, as robust risk appetite lifted the euro and the Singapore dollar.
The Singapore dollar was also helped by strong equities performance, as the local Straits Times Index gained 0.84% on the day.
Further upside for the Singapore dollar will be modest ahead of the MAS meeting, with some risk of a slide on potential profit-taking following the post-meeting policy announcements, the foreign bank strategist said.
Stock gains and a return of risk appetite appeared to have limited impact Friday on Singapore's safe-haven government bonds, which ended the day little changed.
-By Martin Vaughan; +65 6415 4033; martin.vaughan@dowjones.com
