SINGAPORE--The Singapore dollar drifted lower against the U.S. dollar late Monday amid hopes that the U.S. Federal Reserve will start reducing quantitative easing as early as next month as the world's biggest economy stabilizes.
The U.S. dollar was quoted at S$1.2735 near the close of trading in Asia compared with S$1.2695 around the same time Friday. Earlier, it touched as high as S$1.2753.
The U.S. unit currently faces resistance near S$1.2770 and support near S$1.2700.
The U.S. currency is being supported by rising Treasury yields in recent sessions. Despite some less optimistic economic numbers as well as a warning from at least one Fed official that a September start to tapering is not a done deal, U.S. Treasury yields have touched their highest levels in two years.
Yields on Singapore government bonds were also higher, tracking U.S. Treasurys, as prices fell on weakening demand for safe investments.
The yield on the benchmark 10-year Singapore government bond closed 5 basis points higher at 2.63% Monday, while that on the 2-year bond climbed by two basis points to 0.24%.
