Singapore dollar trades below $1.28

The greenback meanwhile weakened with equities closing over 1% higher.

IG Markets Singapore said:

The Singapore dollar edged up slightly against the greenback and now trades below the $1.28, where it started the week.

Last night the talk on trading floors was all about the rising hopes of monetary policy easing as the US economy released more downbeat data about its recovery. This has prompted louder calls for QE3 to be launched.

This would devalue the greenback which saw it lose some ground against global currencies. The local currency slipped to $1.2789 as a result.

Traders will be positioning themselves ahead of the crunch Greek elections this Sunday.

While Asian traders are getting very bearish about the euro, the US dollar is a difficult one to gauge opinion.

RBS meanwhile noted (for 14 June 2012 trading):

The USD weakened throughout most of the session as equities closed over 1% higher. Softer US data, which could have raised expectations for additional easing at next week's FOMC meeting, and talk of possible coordinated central bank liquidity post-Greek election could have contributed to the modestly positive risk-seeking sentiment.

EUR/USD pushed higher and stayed above 1.26 for most of the session while USD/JPY mostly hovered between 79.30-79.40. AUD/USD moved back above parity late in the session.

Looking ahead, we do not expect any change from the BoJ decision, which may disappoint expectations after recent increases in official rhetoric combating a strong JPY.

Indeed, shortly after the UK Mansion House speeches, CNBC reported that Japan is prepared to act on the JPY if needed following the BoE's announcement. BoE's King's speech on monetary policy options we see as slightly negative at this juncture.

The plan to promote growth via lending opportunities could be viewed as a positive but he clearly noted that accommodative monetary policy measures could be done at the same time as any lending plan, a development that we believe will weigh on GBP.