SINGAPORE (Dow Jones)--The Singapore dollar was weaker against its U.S. counterpart late Monday as investors pared back some risk appetite following China's lower growth forecast.
Singapore's stock market was lower, tracking losses across the region, with comments from Chinese Premier Wen Jiabao Monday weighing on sentiment. The leader said that China aims to deliver economic growth of 7.5% in 2012, below the 8.0% level that Beijing has touted for the past eight years.
Key for regional stock and foreign-exchange markets this week will be U.S. nonfarm payrolls data due Friday; however, the global ebb and flow of risk sentiment will drive the Singapore dollar during the week, said Thomas Harr, head of Asian FX strategy at Standard Chartered.
"It's not only U.S. payrolls, it's also risk sentiment globally in markets. Risk appetite may not be receding but it seems to be peaking and that will tend to benefit the U.S. dollar," he said.
Harr expects the U.S. dollar to trade between S$1.2480 and S$1.2600 in the next couple of days.
"I think the market is still short on the pair so if you have a bit of risk aversion you will see some reaction," he said. "But I can't see it being a massive move, volatility will not be that high."
Yields on Singapore government bonds were flat, and analysts said the market is likely to be quiet in the coming days following some recent big-name corporate bond issuances, such as from casino operator Genting Singapore.
-By Matthew Allen, Dow Jones Newswires; +65 64154 158; matthew.allen@dowjones.com
