Singapore dollar continues ascent against the greenback

The US dollar weakens against risk currencies as traders are prepared to take on more risks, says IG Markets Singapore.

IG Markets Singapore said:

The Singapore dollar continued its slow and steady ascent against the greenback overnight.

Traders are feeling slightly more upbeat this week after some good showings from the US corporate earnings season. This has seen global markets put on some solid gains.

It has also seen the US dollar weaken against risk currencies as traders are prepared to take on more risks.

This has seen the US dollar slip to $1.255 against the local currency this morning.

The currency pair has also been affected by Ben Bernanke’s testimony to Congress this week and continuing hopes of QE3, which would be dollar-negative.

BK Asset Management meanwhile noted (for 19 July 2012 trading):

Spain is back in the headlines and causing trouble once again for the euro. Spanish 10 year bond yields settled at 6.93 percent, just a hair shy of the 7% danger zone.

While Spain is gearing up to sign a memorandum of understanding for their bank bailout with Eurozone Finance Ministers on Friday, investors are nervous about the country's ability to reduce its deficit and control its finances with yields on the rise.

Spain had a terribly difficult time attracting investors for their latest bond auction, which reflects the market's general concern that the bank bailout won't mean the end of Spain's troubles.

The euro received a boost after the German Parliament finally approved the rescue package for Spanish banks. The bailout would not have been able to proceed without the monetary support from Germany.

As the leader of the opposition party said, they supported the measure only "because a refusal by Germany would be catastrophic." However the Germans made it clear that they refuse to let the money go directly to Spanish banks, bypassing the sovereign until the European Central Bank takes control of banking regulation in the region.