Singdollar hits 1½-year high against greenback

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The Singapore dollar rose against the greenback yesterday to hit its highest level against the American currency since June 2016.

The increase of 0.3 per cent took the Singdollar to $1.333 to the US dollar - one of many currencies in the region to start the new year on an upward trajectory.

Its impetus here came from expectations that the Monetary Authority of Singapore could tighten monetary policy as early as April in light of a recovery in the services sector.

That sent the currency higher with foreign exchange dealers dismissing a fourth-quarter slowdown in growth due to factories losing a bit of steam.

"We remain sanguine on 2018 growth outlook for now, but watch for potential policy tightening risks," OCBC Bank said in a research note.

Regional currencies made a strong start for the new year as sentiment was boosted by gains in the euro, while a weaker US dollar prompted further interest in Asia.

The greenback's decline last year was its biggest in more than a decade and was fuelled by doubts over the durability of a pick-up in US economic growth following a sweeping tax overhaul.

Taiwan's dollar was the biggest percentage gainer yesterday, rising 0.8 per cent against the US dollar to a more than four-year high.

"It hit a similar level last Friday but pared gains to close flat... What we are seeing today is just a rebound, which is not a surprise," said Mr Gao Qi, Asia forex strategist at Scotiabank.

The yuan was also firmer, gaining 0.1 per cent to a near four-month high against the greenback. Growth in China's manufacturing sector unexpectedly picked up to a four-month high last month, a survey showed.

The South Korean won was also stronger against the dollar, edging up after North Korean leader Kim Jong Un said he was open to dialogue.

The Philippine peso and the Thailand baht did not trade as markets were closed. - REUTERS