The Singapore dollar rose on Thursday as some investors bet on a possible hawkish stance by the central bank in its policy meeting this week, while most emerging Asian currencies gained despite caution before China's growth data.
The Monetary Authority of Singapore (MAS) is widely expected to keep monetary policy on hold on Friday and allow the local dollar to rise at a "modest and gradual" pace against other currencies to help combat persistent inflationary pressures.
But concerns over inflation have prompted some speculation about a surprise tightening by the central bank, dealers said. "The market feels they will lean towards an appreciation bias," said a senior Malaysian bank dealer in Kuala Lumpur.
The US dollar/Singapore dollar fell below a support near 1.2550, where the bottom of the daily Ichimoku cloud sits. There is room for a further US dollar slide, probably to 1.2501, its previous low.
The gains came as most regional peers rose as comments from a European Central Bank official and strong Australian job data eased worries about risks to the global economy, with the South Korean won recovering most of its initial losses.
ECB Executive Board member Benoit Coeure said the scale of market pressure on Spain was not justified and the central bank still had its bond-buying programme as an option. Australian employment surged past all expectations in March.
Investors hesitated to add to positions in emerging Asian currencies ahead of China's first-quarter economic growth data due on Friday. But some dealers and analysts said regional units appeared to have priced in a slowdown in China to some degree. The world's second-largest economy is forecast to have grown 8.3 percent in the first quarter from a year earlier, a Reuters poll showed.
"If growth is higher than 7 percent, that should be OK," said BNP Paribas currency strategist Thio Chin Loo in Singapore, adding emerging Asian currencies would not be hit too hard if the growth figure exceeds that level.
Dollar/won gave up most of its initial rises on exporters' supplies and stop-loss selling, dealers said.
Earlier, the pair hit a three-month high of 1,144.9 on geopolitical tension over North Korea's expected rocket launch.
But exporters took the rises as chances to sell it on caution over possible dollar selling intervention by the foreign exchange authorities. The authorities were suspected of intervening in New York non-deliverable forwards (NDFs) markets on Tuesday overnight, when one-month NDFs rose to 1,150.0, dealers said.
There is also resistance at 1,148.4, the 50 percent Fibonacci retracement of its December-March slides.
Dollar/baht slid on foreign banks' offers, but the pair failed to break through support at 30.760. Trading was subdued as Thai financial markets will be closed for the Songkran Festival from Friday to Monday. The pair has a 55-day moving average at 30.755.
Comments
Comments are closed.