SINGAPORE, FEB 9 (NNN-AGENCIES) — The Singapore dollar fell below the RM3 mark on Friday (Feb 8) for the first time since October last year, as the Malaysian currency continued to strengthen.
The Singdollar fell to an intraday low of RM2.9955 before rising back up to RM2.9994, according to Bloomberg data.
This is the lowest since the Singapore dollar touched RM2.9941 on Aug 31 last year, according to Reuters data.
It is also the first time the ringgit has crossed the psychological level of 3.0 versus the Singapore dollar since Oct 5 last year, when it touched RM2.9986, according to Reuters data.
The Malaysian currency has seen a boost recently on renewed buying interest, said a dealer.
However, analysts said regional currencies could weaken in the face of a generally stronger US dollar.
Most Asian currencies were subdued against a stronger US dollar on Friday, weighed by fresh doubts over whether the United States and China can clinch a trade deal before the Mar 1 deadline and downgrades on global growth.
Markets awaiting progress on US-China trade talks were dismayed when President Donald Trump said he did not plan to meet with his Chinese counterpart Xi Jinping before the deadline to achieve a trade deal.
Adding to concerns about a slowdown in global growth, the European Commission slashed its forecasts for eurozone economic growth this year and next citing trade frictions and domestic challenges
This came on the back of an unexpected slowdown in Germany, tensions over lacklustre growth prospects in Italy and French protests.
“The US dollar strengthened overnight, due more to the travails of its counterparts than a strong dollar story,” said OANDA senior market analyst Jeffrey Halley in a note. “The euro and the British pound continued to wilt as poor Eurozone data, and the Brexit impasse continued. This theme could extend to the Asia session.”
Boosted by demand for safe-haven assets, the dollar index firmed about 0.1 per cent to a near two-week high, putting pressure on Asian currencies.
“The dollar is being supported by worries over global growth and external factors,” said Sim Moh Siong, currency strategist at Bank of Singapore.
“Markets are waiting to see what policy measures can stabilise growth worldwide … until then, it’s hard to see the dollar weakening.”