The Singapore dollar hit a record high against the greenback on Wednesday after inflation in the city-state rose and amid fears of a US recession.
The Singapore unit hit a peak of 1.3463 to one US dollar before falling back to 1.3480 in afternoon trade.
The euro breached 1.60 US dollars for the first time Tuesday on renewed jitters about the US economy, but eased back in Asian trade on Wednesday, dealers said.
The greenback has fallen steeply against world currencies in recent months as US economic growth slowed and fears mounted that the world’s largest economy could fall into a recession.
The local unit shot up earlier this month after Singapore’s de facto central bank further tightened monetary policy in a bid to address a sharp rise in consumer prices.
Inflation, along with the US dollar’s slide, is among the key drivers of the Singapore dollar’s strength, said Puay Yeong Goh, a currency strategist at Barclays.
Official figures on Wednesday showed Singapore’s annual inflation hit 6.7 percent in March. – AFP/ir
Source : Channel NewsAsia – 23 Apr 2008