SINGAPORE--The Singapore dollar weakened against the U.S. dollar Tuesday as the greenback strengthened amid speculation that the U.S. Federal Reserve may soon start reducing its quantitative easing.
The U.S. dollar was quoted at S$1.2642 in the last hour of Asian trade, compared with S$1.2618 around the same time on Monday. During the day, it rose as high as S$1.2655, the highest level since Aug. 8.
The U.S. dollar declined after a disappointing U.S. jobs report last week suggested that the Fed could delay plans to scale back its huge bond-buying program. However, it recovered this week and the market is likely to keep a close eye on upcoming data, including retail sales figures due later in the global day, for clues about the state of the world's largest economy.
The U.S. dollar may face resistance near S$1.2680 while support lies near S$1.2600.
Singapore government bonds drifted lower, tracking losses in U.S. Treasurys as investors chased riskier assets such as stocks. Yield on the benchmark 10-year Singapore government bond rose five basis points to 2.41% while the two-year yield edged higher by a hundredth of a percentage point to 0.23%.
