The Singapore dollar’s exchange rate was higher late in Asia today as regional currency markets received a boost from slightly improved risk sentiment and better than expected data on Singapore’s GDP.
The US dollar 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 in a poll.
“There is some risk-taking in the market, and that’s helping Asian currencies,” said a trader at a regional bank. “The U.S. dollar-Singapore dollar pair may trend a little lower for the rest of the session.”
He tipped support for the greenback over the rest of the global day at S$1.2890, with resistance at S$1.2990.
The euro and risk-sensitive currencies were favored against the US dollar 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.