Singapore dollar sits at $1.2285

This as traders ease out of dollar positions, says IG Markets Singapore.

IG Markets Singapore said:

The Singapore dollar managed to slop its slow slide against the greenback as it gained slight ground last night.

The local currency sits at $1.2285 this morning, creeping back below the $1.23 mark as traders ease out of dollar positions.

The global economy is showing signs of weakness and the US economy is under the spotlight as its corporate earnings season begins this week.

Closer to home, estimated Q3 GDP figures for Singapore will be released on Friday and may not paint a rosy picture.

If so this could see the local currency edge down further against the greenback as the MAS keeps it appreciation in check.

A weaker Singapore dollar helps make exports cheaper. As Singapore is so heavily dependent on exports, this could be a welcome shot in the arm for the economy.

BK Asset Management meanwhile noted:

The euro received no help from the launch of region's permanent rescue fund, the European Stability Mechanism or ESM for short.

At this point, a lending capacity of 200 billion euros is just not enough to restore confidence in the Eurozone and it doesn't appear that European nations have grown any more willing to provide support to countries in need.

Aside from kicking off the fund, European Finance Ministers are discussing Spanish and Greek finances in Luxembourg today and tomorrow. Unfortunately, no decisions are expected.

Everyone from the Spanish Finance Minister to the EU President claims that Spain does not need a bailout and regardless of whether these are denials or reality, skepticism by investors prevented the EUR/USD from rallying further.

The economic challenges in Spain and Greece will continue to cast a dark cloud over the euro which ended lower against the U.S. dollar for the first time in 5 trading days.