SEOUL, Oct 14: The Singapore dollar turned higher on Monday as the central bank kept its tight monetary policy with stronger-than-expected third quarter growth, warning that core inflation is likely to accelerate in 2014.
The city-state’s currency was quoted at 1.2456 per U.S. dollar as of 0200 GMT, compared with Friday’s close of 1.2460.
The Singapore dollar stood at 1.2474 before the Monetary Authority of Singapore stuck to its stance of allowing ‘modest and gradual’ appreciation of the currency as expected.
The local dollar found more support as the trade-dependent Southeast Asian city-state reported better-than-expected 5.1 percent growth in third quarter gross domestic product from a year earlier due to continued strength in services.
‘Investors are likely to buy the Singapore dollar around 1.2480-1.2490 as there is no rational to sell it,’ said a foreign bank trader in Singapore.
‘For now, it looks difficult to chase the Singapore dollar here, given the U.S. Debt issue,’ the trader added.
The Singapore dollar is seen having a chart resistance around 1.2450, but it may head to 1.2423, the high of Sept. 19, once the level is broken, analysts said.
Most emerging Asian currencies and regional shares fell as a possible U.S. Debt default loomed after the failure of weekend talks in Washington, though expectations are that a last-minute compromise will be reached.
(AGENCIES)
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