SINGAPORE (Dow Jones)--The Singapore dollar was weaker late in Asia Thursday, falling sharply against the U.S. dollar in early morning trade as it tracked a sell-off in the euro overnight, and then mirrored the weakness of other risk-sensitive Asian currencies through the day.
Markets across the region were dogged by risk-averse sentiment after the euro slid along with the U.S. and European equity markets overnight. Investors remain cautious over a long-term Italian debt auction due later in the global day.
The U.S. dollar was quoted at S$1.3024 late Thursday compared with S$1.2975 late Wednesday. It hit a high of S$1.3030 at around 0130 GMT on the back of another spell of euro selling in Asia.
Analysts noted the Singapore dollar's third straight day of decline against the greenback, and said that safe-haven demand for the dollar amid worries over Europe will continue to weigh on the local unit into 2012.
"The greenback is expected to remain supported in 1Q 2012 due to the woes in Europe and given the recent improvements in U.S. economic data," OCBC Bank said. However, it is expecting the greenback to weaken in the second half of next year.
Dow Jones technical analysis pegs the bollinger band resistance for the greenback at S$1.3038 and then S$1.3120. Support is at S$1.2955 and then S$1.2875.
Singapore government bonds were little changed. "Nothing much is happening and everyone is in a holiday mood. (There's) no trade, no call," said a trader at a local bank.
-By Matthew Allen, Dow Jones Newswires; +65 64154 158; matthew.allen@dowjones.com
