WSJ:Singapore Dollar Higher Late as Investors Look for Easing
Latest Change
USD/SGD 1.2542 -0.0018
Overnight Rate 0.13% Unchanged
2-Year Bond Yield 0.19% +2 bps
10-Year Bond Yield 1.37% +1 bp
2-Year Swap Offer 0.49% +1 bp
10-Year Swap Offer 1.64% Unchanged
2-10-Year Swap Curve 115 bps -1 bp
By Martin Vaughan
SINGAPORE--The Singapore dollar was higher against the U.S. dollar late Friday in Asia, trading close to a two-month high as expectations of monetary easing by the U.S. and China continued to fuel appetite for Asian currencies.
The U.S. dollar was at S$1.2542, edging up slightly from a two-month low of S$1.2525 in New York trade.
In Asia Friday, the Singapore unit consolidated after five straight days of gains against the greenback.
"We've seen some profit-taking today ahead of the weekend," said an analyst at a local bank, who added that the currency may have some scope to appreciate further if there are fresh signs of economic weakness in the U.S. and China.
Lately every bit of worse-than-expected data in the large economies is interpreted as adding to the case for easing. Thursday it was the turn of U.S. housing data and new jobless claims to disappoint.
One key upcoming date for the Singapore dollar will be the July 24 release of HSBC's flash Purchasing Managers' Index for China, the local bank analyst said.
The analyst said that in trade-weighted terms, the Singapore dollar is trading at about 1% above the mid-point of its trading band. The U.S. dollar is likely to trade in a range of S$1.2480 to S$1.2600 in the near term.
Also supporting the Singapore dollar are expectations of merger activity, after Heineken N.V. (HEIA.AE) Friday offered to expand its stake in Asia Pacific Breweries Ltd. (A46.SG) with a $5.1 billion offer.
Singapore bond yields rose slightly as investors anticipating easing by the large world powers went for riskier assets, tamping down appetite for government bonds.
Write to Martin Vaughan at martin.vaughan@dowjones.com
