Singapore dollar moves higher against the greenback

The local currency is trading around 1.2270.

IG Markets Singapore noted:

The SGD has moved back higher against the greenback, currently trading around 1.2270, having once again tested what seems to be the short-term resistance level of 1.23 yesterday.

Corporate earnings released from technology giants like Google and IBM showed decent quarterly performance. Germany boasted improved investor confidence and there were positive noises once again from the ECB, with comments that Europe has ‘passed the dark clouds by’.

With these better-than-expected numbers the market seems to have once again factored in a rosier 2013, with the MSCI world share index hitting new 20-month highs as risk-on trades seem to be in favour once again.

The focus in Asia was BoJ’s announcement, with the anticipated increase of the inflation target from 1% to 2%. Although yen bears welcome the idea of the open-ended asset-purchase programme which was announced, the fact that the move was not as aggressive as some had hoped has led the yen to reverse some of its four-month losses against most of its peers, trading at just above 72 per SGD.

OCBC Treasury Research meanwhile reported:

The SGD NEER is currently around +0.64% above its perceived parity (1.2355) while the extreme strong end of the NEER fluctuation band is estimated at around 1.2170. For today, expect the USD-SGD to be capped near 1.2330.