Currency Briefing - what you need to know for Wed April 4, 2012

The Singapore dollar continues to trade within a tight range against the US dollar, sitting at $1.2548.

IG Markets Singapore said:

The Singapore dollar has held up against the greenback despite last night’s rally against major currencies.

The Fed’s open market committee (FMOC) met last night and quashed hopes of a third round of quantitative easing (QE3) happening anytime soon. This led to a spike in the dollar while equities and commodities fell.

But the Singapore dollar has held up against the US dollar currently sitting at $1.2548 as it continues to trade within a tight range.

Asian currencies have been helped by a firmer risk sentiment after a slew of upbeat manufacturing data, notably from the US and China. Singapore also posted some resilient factory output data today with its manufacturing and electronics sectors seeing further strengthening, although overall output was slightly down.

The local currency is likely to chart a steady course against the greenback as we head towards the Monetary Authority of Singapore’s semi-annual policy meeting this month which will discuss the appreciation of the currency.

RBS meanwhile reported (for 3 April 2012 trading):

The USD was largely treading water versus most of the G10 currencies, with the exception of GBP and AUD, ahead of the March FOMC minutes.

The minutes did not show any discussion of new policies or strategies and largely reflect the cautious, yet somewhat more constructive tone, from the March statement. The headlines in the press, however, were decidedly more hawkish than the minutes and boosted the USD across the G10 as US yields and swap rates rose across the curve.

Even after market participants had time to digest the minutes, the USD held onto its inter-session gains, with EUR/USD below 1.3240 and USD/JPY around 82.80 at the time of writing.