Singapore dollar starts the week at $1.2597

The local currency has kept up its strengthening against the greenback as traders start the build-up to a key Fed meeting, says IG Markets Singapore.

IG Markets Singapore said:

The Singapore dollar has kept up its strengthening against the US currency as traders start the build-up to a key Fed meeting.

The Fed’s Open Market Committee meets next week but anticipation is growing already over hopes it will announce more policy easing measures. Such an outcome would depress the value of the greenback.

Last week, these same hopes drove down the greenback ahead of Ben Bernanke testimony before Congress.

This saw the US dollar fall to below $1.26 against the local currency.

This morning the Sing Dollar starts the week at $1.2597 having given up a little of its gains over the weekend. It had hit a two-month high of $1.2525 in Friday’s US session.

BK Asset Management meanwhile noted (for 20 July 2012 trading):

It has been another rough week for the euro, which dropped to a fresh 2 year low against the U.S. dollar, 3 year low against the British pound, 12 year low against the Japanese Yen and record against the Australian, New Zealand and Canadian dollars.

What is particularly disconcerting about these milestones is that they have been set on a regular basis this month. The euro is being killed by ongoing debt troubles and unfortunately even the approval of a bank bailout for Spain has not calmed the markets.

With 10 year Spanish bond yields climbing to a record high of 7.18%, Spain is officially the hotspot for uncertainty and if yields do not decline, the problems will only worsen.