Singapore Dollar Weaker Late As China, Greece Worries Weigh On Sentiment

The Singapore dollar was weaker late Monday, weighed by the weekend report that China swung to a massive trade deficit in February and continued concerns about the impact of a Greek default on global credit markets.

Despite some support for Asian currencies from stronger-than-expected U.S. employment data Friday, news of China's $31.48 billion trade deficit for February eroded investors' confidence.

Greece also remains a lingering concern after the International Swaps and Derivatives Association, known as ISDA, declared Friday that a "credit event"--essentially a default--occurred in Greece's debt, which will likely trigger a net $3.2 billion in payouts between buyers and sellers of credit default swaps on Greek sovereign credit.

"Between the euro and the U.S. dollar, relative fundamentals still favor the latter," DBS said in a research note.

"At best, financial markets have stabilized but it is too early to declare that the worst is over for the euro-zone sovereign debt crisis."

An analyst at a local bank expects the U.S. currency to trade in a S$1.2470-S$1.2660 range pending a turnaround in global sentiment.

Singapore government bond yields were little changed, in line with the modest moves made by their U.S. counterparts after Greek worries mitigated the rise in yields that followed the employment numbers.