SINGAPORE--The Singapore dollar fell against the U.S. dollar Wednesday but stayed in a tight range as market participants awaited developments in the U.S. later in the global day.
The U.S. dollar was quoted at S$1.2725 in the last hour of Asian trade, compared with S$1.2675 around the same time on Tuesday. Earlier, it hit S$1.2745, the highest since July 10.
Singapore's unemployment rate edged higher to 2.1% in the quarter that ended June from 1.9% in the previous three months, according to data released by the government.
"I don't think the market is reacting to the unemployment rate," movement in the local dollar is more because of the U.S. Federal Reserve meeting and growth data, said Suan Teck Kin, a currency analyst at United Overseas Bank in Singapore.
He tips a S$1.2689 to S$1.2753 range for the U.S. currency for the rest of the day.
The U.S. government will release its second quarter gross domestic product estimate and Fed officials will deliver the outcome of a monetary policy meeting later in the global day.
The dollar could be sold if the GDP figures are weak, increasing speculation of continued Fed easing.
If, on the other hand, the figures are strong, it would raise speculation that the Fed could begin slowing its bond-buying program at its September meeting, according to analysts. This would put upward pressure on the U.S. dollar and U.S. Treasury yields.
Longer-dated Singapore government bonds fell. The yield on the benchmark 10-year bond rose three basis points to 2.48%; that on the 2-year bond was static at 0.22%.
