Fiscal cliff tagged as the biggest obstacle in 2012

The Singapore dollar sits at $1.2210.

IG Markets Singapore said:

The Singapore dollar heads into December looking likely to repeat the November sideways trend reaming locked in a very narrow path.

The local currency hasn't been able to break free from $1.22 - 1.225 as too many obstacles have stood in the way.

The current one, and biggest this year, is the fiscal cliff of tax hikes and spending cuts the US economy faces unless it can come up with an eleventh hour agreement.

These tense political negotiations are likely to dictate action in the FX markets until the end of the year. The local currency sits at $1.2210 this morning.

An eventual deal could see a rally across Asian currencies although most traders expect a deal to materialize, so any pop in risk currencies may not be significant.