The Singapore dollar’s exchange rate was lower late in Asia Thursday against the US dollar, tracking weakness in most Asian currencies and following the euro lower as investor sentiment took a hit over uncertainty regarding Greece’s sovereign debt troubles.
Traders and analysts say the market will remain cautious in coming sessions ahead of a eurogroup meeting on the matter Monday.
“The Greece debt issues will likely keep sentiment cautious,” United Overseas Bank said in a research note.
Analysts also said sentiment took a knock from Moody’s Investors Service putting 17 global banks and 114 European financial institutions on review for possible credit-rating downgrade.
On the domestic front, the Singapore dollar didn’t react much to government data released Thursday showing the economy contracted 2.5% in the fourth quarter of 2011 in seasonally adjusted, annualized terms, rather than 4.9% estimated last month.
“The continual recovery in the U.S. and stabilisation in the euro zone situation are more important for Singapore companies’ earnings growth outlook and monetary policy, in our view,” Credit Suisse said in a research note.