SINGAPORE--The Singapore dollar strengthened slightly against the U.S. dollar Friday, breaking momentum in its U.S. counterpart that had propelled the Singapore dollar to a four-month low earlier in the week.
The trend was unexpected, since the U.S. will announce jobs data late Friday which economists expect to be robust, thereby raising the likelihood that the country's central bank will continue with reductions to its bond-buying program, drawing investment out of Asian markets including Singapore and boosting the U.S. dollar.
The Singapore dollar was quoted at S$1.2698 to its U.S. counterpart, in line with a slight strengthening of most regional currencies. Despite this, most analysts still expect the U.S. dollar to gain.
"We would expect that a stronger set of U.S. payroll data [would] remain supportive of the USD against Asia ex-Japan when it is released," UOB's Ho Woei Chen said in an email.
Singapore government bond yields fell slightly, with the shorter-term two-year bond down 0.02% and the 10-year yield losing six hundredths of a percentage point.
"We saw decent activity in the Singapore Government Securities market, as the week was littered with data out from the U.S.," UOB said in a note. "While the [U.S. Federal Open Market Committee] minutes showed a commitment to unwinding quantitative easing, there was nothing to get the investors excited about buying USD," the bank said, referring to the Fed's bond-buying program.
