SINGAPORE--The Singapore dollar fell against the U.S. dollar late on Wednesday as global investors chased bets in the greenback that has become attractive after the U.S. Federal Reserve hinted at slowing its bond-buying program.
The U.S. dollar was quoted at S$1.2686 in the last hour of trade in Asia, compared with S$1.2646 around the same time on Tuesday. The U.S. dollar on Wednesday morning climbed to S$1.2727, the highest level since July 13 last year.
"The Dollar-Sing has not been able to hold above the 1.2700 level in a convincing fashion. There may be shallow pullbacks but it's only a matter of time before we have a convincing break above 1.2700, which remains a key level," said Khoon Goh, a currency analyst with ANZ Bank in Singapore. "It's very hard to fight this global demand for U.S. dollars."
He tipped S$1.2730 as resistance for the U.S. unit, which roughly corresponds to the mid-point of the Singapore dollar's nominal effective exchange-rate band, according to his calculations.
Longer-dated Singapore government bonds fell as investors were attracted to riskier assets and as interest in U.S. Treasurys also declined. Yield on the benchmark 10-year bond rose 10 basis points higher to 1.82% while that on the two-year bond was unchanged at 0.32%. That caused the yield curve to steepen, signaling investors' expectations for an improving global economy.
Write to Gaurav Raghuvanshi at gaurav.raghuvanshi@dowjones.com
