SINGAPORE (Dow Jones)--The Singapore dollar was lower late in Asia Friday as global markets were disappointed at the perceived lack of action from the European Central Bank, and after European Union leaders failed to agree on proposed E.U. treaty changes.
Toward the close of Asian trade, the Singapore dollar was changing hands at S$1.3025, the highest since Nov. 29, compared with S$1.2873 around the same time on Thursday.
The U.S. dollar faces immediate resistance near S$1.3040 and then at S$1.3151, while it may be supported near S$1.2930, said an analyst at a global bank.
"The risk currencies have traded lower on the whole, with most crosses trading around their day's lows," IG Markets said in a note to clients. "There have been no big negative moves so far but this could change as European investors awake to their leaders' latest announcements."
A summit of E.U. leaders in Brussels failed to secure the full backing of the bloc's 27 nations for treaty changes to help fight the euro zone sovereign debt crisis by coordinating fiscal policy. However, 23 members agreed to form a new fiscal compact and signaled they would provide extra financial support to troubled members.
On Thursday, the ECB cut its key interest rate by 25 basis points as widely expected, but didn't announce plans to step up a government bond purchase program to help ailing euro-zone countries--a move for which a section of the markets had hoped.
Amid the conflicting news from Europe, Singapore government bonds were a tad higher, recovering a part of their losses from previous sessions. Yields, which move inversely to prices, fell more at the longer end, flattening the yield curve in line with the nervous sentiment in the market.
-By Gaurav Raghuvanshi, Dow Jones Newswires; +65 64154 154; gaurav.raghuvanshi@dowjones.com
