Currency Briefing - what you need to know for Wed April 11, 2012

The Singapore dollar is almost unchanged, currently trading at $1.2621.

IG Markets Singapore said:

The Singapore dollar heads into Friday’s Monetary Authority of Singapore (MAS) holding steady against the Greenback despite a significant shift towards safe havens as the global economy wobbles.

The local currency sits at $1.2621, virtually unchanged. Stock markets are tumbling off a series of bad economic news – including the re-emergence of the eurozone debt crisis, US unemployment figures and China’s slowing imports.

This has led to flight to safety back into safe-haven assets like the US dollar, yen and gold. But the SGD/USD currency pair has remained stable during this volatility.

Friday is a key date for the Singapore dollar as MAS meets to decide its future projection. MAS uses the currency as an inflation-curbing tool. A strong dollar helps to keep a lid on both imported and domestic inflation.

Therefore a gradual appreciation policy is likely to remain for at least the remainder of 2012 as inflation remains stubbornly high.

RBS meanwhile noted (for 10 April 2012 trading):

The decidedly risk-off tone across all asset markets pushed USD/JPY steadily lower throughout the session.

The lower Treasury yields removed interest rate support for the USD and the pair went from the overnight high above 81.80 down below 80.80 at the time of writing. The USD managed to strengthen versus the higher beta commodity currencies but was much choppier versus EUR, GBP and CHF.

Although EUR/USD stayed within a range for most of the session, the resurgence of sovereign risk concerns in the Euro-area, with the Spain 5-year CDS nearing its November 2011 record high, and our expectation of continued economic divergence in favour of the US over the Euro-area, has us continuing to recommend aggressive short EUR exposure versus the GBP, CAD and USD.