SINGAPORE--The Singapore dollar drifted a little lower late Monday but stayed in a tight range, as traders were likely not willing to place fresh bets before a much-watched meeting of the U.S. Federal Open Market Committee later this week.
The U.S. dollar was quoted at S$1.2540 in the last hour of trade compared with S$1.2528 around the same time Friday. Earlier, it touched a high of S$1.2560 before easing.
Local export data, which came in weaker than expected, had little impact on the currency pair. According to government data released early Monday, Singapore's non-oil domestic exports fell 4.6% in May compared with the same month a year earlier, worse than the median prediction of a 0.3% decline by seven economists in a Dow Jones Newswires poll.
Markets have been in risk-reduction mode for the last three weeks since U.S. Federal Reserve Chairman Ben Bernanke hinted at reducing the size of the Fed's bond-buying program on May 22.
"Bernanke will need to reassure markets that the Fed is putting the U.S. recovery first. He will [likely] say that reducing asset purchases is about reducing stimulus and not about tightening," DBS Bank said in a note.
Resistance for the U.S. dollar lies near S$1.2600, while the currency should find support near S$1.2480, according to Dow Jones technical analysis.
Singapore government bonds were mixed. The yield on the benchmark 10-year bond rose sharply by five basis points to 2.14%, while that on the two-year bond fell by a hundredth of a percentage point to 0.25%. The steeper yield curve reflects calmer market sentiment so far this week.
Write to Gaurav Raghuvanshi at gaurav.raghuvanshi@dowjones.com
