Singapore dollar hits 10-month low

The Singapore dollar hit a near 10-month low on Friday after soft exports data, and is set to suffer its worst week in a year - leading weekly declines in emerging Asian currencies. The US dollar rose on remarks by a regional Federal Reserve president envisaging an impending scale-back and then an end to bond-buying stimulus measures.
The Singapore currency fell 0.5 percent to 1.2578 to the US dollar, its weakest since July 25, 2012, on stop-loss selling and in reaction to data showing non-oil domestic exports in April barely changed. Hedge funds and speculators drove the selling, traders said.
The Singapore dollar has lost 1.5 percent against the greenback so far this week, according to Thomson Reuters data. If it maintains the loss, it would be the largest weekly slide since the week ended May 18, 2012, the data showed. "This latest up move in the USD/SGD probably demonstrates discretionary USD bullishness in the USD/SGD," OCBC Bank said in a note.
"Notably, this move we think may be symptomatic of a broader willingness by the regional currencies to defer to a strong dollar and a weak yen," it added. Most units were on course for a weekly decline. The Malaysian ringgit has depreciated 1.2 percent against the dollar so far this week on disappointing first quarter growth data that spurred investors to take profits.
Last week, the ringgit jumped 1.6 percent, its largest weekly gain since September last year, after the ruling coalition's election victory eased worries about political uncertainty and policy discontinuity. The South Korean won slid 0.9 percent and the Taiwan dollar has lost 0.5 percent. "Asian currencies can fall further on the dollar strength and possible stabilisation in the exuberance in Asia," said Saktiandi Supaat, head of FX research for Maybank in Singapore.
Regional currencies may slide even if the Fed does not shift its easing policy, Supaat said: "As long as the economy remains like it is and there are small signs of positive data, and the US stock market rallies, the dollar will also strengthen." The Indonesian rupiah eased 0.1 percent to 9,760 per dollar, the weakest since February 1, on dollar demand from local corporates.
The rupiah is expected to stay under pressure from uncertainty over the country's fuel subsidy policy, analysts said. "We are disappointed with the government's continued delay in hiking fuel prices, which has kept oil imports high and weighs on the trade balance," ANZ said in a note, adding it still sees downside risk.
On April 30, Indonesia's president said parliament must provide compensation next month to the poor before he increases subsidised fuel prices that are threatening to deepen the fiscal deficit. Some analysts said it may be difficult for the government to raise fuel prices because of elections next year.