The SGD was slightly weaker against the U.S. dollar late Wednesday as investors eased off a recent rally in risk appetite ahead of key events in the debt-stricken euro zone.
Analysts said market participants are awaiting a meeting later in the global day where Germany’s Chancellor Angela Merkel and Italy’s Prime Minister Mario Monti are likely to discuss efforts to contain the euro zone’s sovereign debt problem. Also in focus are Spanish and Italian government bond auctions Thursday, and a meeting of the European Central Bank’s monetary policy committee the same day.
Lifted by lingering euro-zone uncertainty, the USD made most of its gains in early trade, pushing as high as S$1.2936, though plying a narrow range of S$1.2913 to S$1.2936 for much of the session.
Such uncertainty will underpin the USD strength against the EUR and Asian currencies in the near term, and should allow the greenback to drift higher against the SGD. Singapore government bonds eased across the curve as sentiment stayed positive in the local equities market, where most stocks extended Tuesday’s rally.
EasyForexNews Research Team