Singapore dollar hitting new lows against the greenback

The local currency, siding against the US dollar, currently sits at $1.2939.

IG Markets Singapore said:

The US dollar has broken through the $1.29 ceiling against the Singapore dollar as what can only be described as market turmoil grips investors.

Friday’s much weaker non-farm payrolls data sent markets spiraling as another piece of negative data ended a poor weak. China and eurozone woes had already dented trader sentiment.

The local currency has been siding against the greenback ever since the Greek elections failed to secure a pro-bailout government.

The Singapore dollar has been hitting fresh lows against the strengthening US dollar and currently sits at $1.2939.

As risk-off trading become the norm local currency traders will be wondering just how close the Singapore dollar is to the upper limits of its NEER band.

GFT meanwhile noted (for 1 June 2012 trading):

After a significant amount of intraday volatility and a drop to a fresh 22 month low of 1.2288, the euro ended the North American trading session higher against the U.S. dollar. This is only the third time in more than a month that the EUR/USD rallied as investors hope for less pain in June.

Expectations for support from European policymakers can only be credited for a small part of the euro’s rally because so far there has been nothing but radio silence. Prior speculation that the IMF is preparing for a bailout of Spain has been denied by IMF Chief Christine Lagarde.

However as stocks continue to fall and currencies extend their losses, the pressure for a response from European policymakers will only increase and with a number of meetings scheduled for this month, they won’t be able to avoid the issues for much longer. Yet an abysmal non-farm payrolls report is the primary reason why the EUR/USD rebounded today.