Bailout for Spanish banks showing little effect on Singapore dollar

The local currency is trading at $1.275 against the US dollar.

IG Markets Singapore said:

The Singapore dollar is little changed this morning after an eventful weekend which saw a €100 billion bailout for Spanish banks while Chinese data was digested by investors.

This is set to give a big lift to Asian markets today but has so far failed to make an impact to the Singapore dollar. Instead it trades at $1.275 against the US dollar this morning.

This is the heightened level it reached last week as eurozone tensions remained high and Fed QE3 talk reached fever pitch.

But the pair are little moved today although the risk factor has come down a notch, particularly from the emergency funding given to Spanish banks.

Chinese data was a mixed bag for Asian investors as a soft landing looks the most likely outcome despite fears growth has fallen much lower.

RBS meanwhile noted (for 8 June 2012 trading):

The USD weakened against much of the G10 as equities finished the session in positive territory. But trading ranges were nevertheless relatively tight, particularly given the upcoming event risks over the weekend, which include Chinese macro data and a potential request for aid by Spain on behalf of its banking sector.

IMM data as of the week ended 5 June showed yet another record net short in EUR speculative positioning at -214k contracts versus -203k previously. JPY positioning flipped from net short to net long at +12k contracts while GBP positioning fell into net short territory at -3k. AUD net short speculative positioning was extended by 16k to -51k and CAD net longs were pared for the 5th consecutive week to 15k.