SINGAPORE (Dow Jones)--The Singapore dollar was weaker late in Asian trade Tuesday as investors sought the safety of the greenback, amid concerns over stalled U.S. deficit-reduction talks and the simmering euro-zone debt crisis.
The U.S. unit rose as high as S$1.3051 overnight, up from S$1.2983 late in Asia Monday, after a U.S. congressional committee said it had failed to agree on proposals to cut the country's debt. This impasse would lead to automatic reduction in defense and domestic spending which the market fears may potentially curb U.S. growth next year.
The greenback subsequently languished within a narrow S$1.3000 to S$1.3050 band for much of the session.
"Asian currencies may start to look increasingly influenced by the (Chinese yuan) fixing with most of the bad news surrounding the euro-zone crisis and the failure of reaching the deficit reduction measures for the U.S. debt ceiling arrangement," Maybank said.
The house expects Asian currencies to remain range-bound, with some short-covering ahead of the U.S. Thanksgiving holiday on Thursday. For Tuesday, it pegged resistance for the U.S. dollar at S$1.3081, with support at S$1.3000.
Yields on Singapore government bonds rose, especially on longer-dated notes, as the local stock market showed signs of recovering from a five-session losing streak.
-By Chun Han Wong, Dow Jones Newswires; +65 64154 160; chunhan.wong@dowjones.com
