SINGAPORE--The Singapore dollar drifted lower late on Thursday as traders continued to favor the U.S. dollar following upbeat data from the world's biggest economy this week.
The U.S. dollar was quoted at S$1.2520 toward the end of the Asian trading day after touching S$1.2535 intraday, the highest since July 27. Near the close of Asian trading hours on Wednesday, the greenback had quoted at S$1.2490.
The U.S. currency gained against most Asian currencies, hitting a one-month high against the Japanese yen, as encouraging U.S. economic data lowered expectations for more easing by the Federal Reserve.
Dealers in Tokyo said the dollar got a tailwind from gains in U.S. Treasury yields after U.S. economic indicators dampened speculation about a third round of quantitative easing in the near term.
Trading volumes in the currency markets were lower, accentuating the moves, an analyst said.
"There's a lack of market moving news and the recent strength of the Singapore dollar is probably dissipating," said United Overseas Bank analyst Suan Teck Kin.
He tipped S$1.2549 as resistance level for the U.S. dollar for the rest of the global day and S$1.2487 as support.
Longer-dated Singapore government bonds gained in the morning, steepening the yield curve in line with the slightly more upbeat global economic environment. The yield on the benchmark 10-year Singapore government bond was 3 basis points higher at 1.43% while that on the 2-year was flat at 0.22%.
Write to Gaurav Raghuvanshi at gaurav.raghuvanshi@dowjones.com
