The SGD was higher late in Asia as regional currency markets received a boost from slightly improved risk sentiment and better-than-expected data on the country’s gross domestic product.
The USD was quoted as low as S$1.2890 during the session, the weakest since Dec. 8, before it recovered a bit to reach S$1.2905 in the closing moments of Asian trade.
The greenback fell in the morning after the government released data showing that Singapore’s economy contracted 4.9% in the fourth quarter from the third in seasonally adjusted and annualized terms, slightly less than the 5.5% predicted by analysts. Euro and risk-sensitive currencies were favored against the USD Tuesday as traders returning to work after the quiet holiday period began to clear some of the short positions they had taken before the end of 2011, according to market participants.
Better-than-expected manufacturing data from China overnight also helped to brighten sentiment, pushing the Australian dollar to a three-week high. Singapore government bonds were a little higher across maturities amid low volumes, as dealers remained cautious on the first trading day of the year.
EasyForexNews Research Team