Singapore $ at 14-year high versus ringgit

The Singapore dollar hit a 14-year high against the ringgit on Wednesday as offshore funds continued to seek relatively safer assets and on views that Malaysia may allow a weaker currency to spur growth amid global economic slowdown.
The city-state's currency rose 0.7 percent against the neighbouring unit to 2.5170, the highest since July 1998, as real money accounts and hedge funds bought it.
That came even though yields on Malaysian government bonds stayed much higher than Singapore bonds. Spread between 10-year Malaysian bonds and 10-year Singapore bonds has widened 15 basis points (BPS) so far this month. "Investors really like Singapore assets due to safety, the stable Singapore dollar and low rates," said BNP Paribas currency strategist Thio Chin Loo in Singapore.
Singapore is the only country in emerging Asia with a credit rating of AAA and its currency has been the second best-performing regional unit after the Philippine peso with a 2.5 percent gain versus the US dollar.
Saktiandi Supaat, head of FX research at Maybank in Singapore, said the Singapore dollar is expected to remain firm against the ringgit this year.
Singapore state investment firm Temasek Holdings is in talks to buy a stake in a 4 billion Malaysian ringgit ($1.26 billion) project in Malaysia's southern state of Johor, the Business Times reported earlier. That may boost demand for ringgit.
Meanwhile, most emerging Asian currencies were mixed amid worries about the impact of a global slowdown on corporate earnings, while investors were not convinced the euro zone can bring down the borrowing costs of its debt-ridden members.
Investors are keeping an eye on the result of a German court hearing on the euro zone bailout fund. The Philippine peso dipped against the dollar when the country's economic planning chief said it should monitor more closely the impact of a stronger peso on exports.
"We need to ensure we are not eroding further the competitiveness of our exports, that would mean more serious unemployment problems," said Arsenio Balisacan, economic planning secretary. But the peso's downside was limited with investors lined up to buy around 42.00 on dips, dealers said. The South Korean won earlier slid on dollar demand from local importers and stock-linked outflows. But bond inflows and exporters' bids for settlements helped the currency rebound.