The Singapore dollar hit a record high against the dollar on Thursday as the central bank tightened policy amid continuous signs of robust growth in Asia, helping a rebound in its peers and cementing views that regional authorities will keep making anti-inflation efforts their priority.
Early Thursday, the Monetary Authority of Singapore (MAS) slightly tightened monetary policy sanctioning an immediate rise in the value of its currency to record highs, saying headline inflation will likely stay "elevated". Right after the MAS decision, the Singapore dollar strengthened to an all-time high of 1.2452 per US dollar, but those gains were quickly erased as investors covered short positions in the greenback. However, the Singapore dollar rose again as investors built up fresh dollar-short positions and hedge funds cited buying the local currency.
The won rebounded against the dollar on exporters' demand for settlements after suffering from dollar-short coverings. The won also fell against the yen on macro funds' selling with profit-taking hitting yen crosses. The ringgit hit its strongest since October 1997 on the MAS tightening and the rise in the Singapore dollar although the Malaysian central bank was spotted buying dollars to check its strength, especially around 3.0180.
The Malaysian currency strengthened to as firm as 3.0110 per US dollar. The ringgit also touched a 14-month high against the Singapore dollar as European investors covered short Singapore dollar/ringgit positions. The peso recovered most of its earlier losses on demand from leveraged accounts.
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