The Singapore dollar hit new highs on Thursday after the US dollar sunk further on expectations of renewed interest rate cuts.
At noon, the Singapore unit traded at 1.3512 to one US dollar - off a high of 1.3504 - against 1.3559 on Wednesday.
The euro on Wednesday reached an all-time high against the US currency of 1.5979 dollars. The greenback has fallen steeply against other world currencies in recent months as US economic growth slowed and fears mounted that the world's largest economy could fall into a recession.
A flurry of interest rate cuts has spurred a dollar sell-off. Investors generally prefer to invest in countries where rates are trending higher so they can reap better returns.
Two US government reports added to the US dollar's woes.
The Labour Department released a monthly snapshot showing that consumer prices rose a modest 0.3 per cent in March amid a spike in energy prices. A separate report from the Commerce Department revealed that the US housing market remains stuck in the doldrums.
Besides the overall weakness of the greenback, Singapore's strong economic fundamentals are also supporting the local currency, said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia.
The local unit shot up last week after Singapore's de facto central bank further tightened monetary policy in a bid to address a sharp rise in inflation.
The government said that Singapore's economy grew at an annual 7.2 per cent in the first quarter, faster than the 5.4 per cent expansion recorded in the previous three months. -- AFP
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