Singapore Dollar Sinks on Easing as U.S. Futures Advance

(Bloomberg) -- The Singaporean dollar slid to its weakest level since 2010 after the central bank unexpectedly eased monetary policy. U.S. equity-index futures climbed as Apple Inc. reported record sales, while oil dropped.

Singapore’s dollar sank as much as 1.3 percent by 3:26 p.m. in Tokyo as policy makers reduced the managed currency’s pace of appreciation. Australia’s dollar advanced versus the greenback after inflation accelerated. Nasdaq 100 Index futures increased 1.2 percent as Apple, the biggest stock on the gauge, traded more than 5 percent above its closing price. The MSCI Asia Pacific Index fluctuated near a four-month high. U.S. crude fell for the fourth time in five days.

Singapore’s policy makers joined global peers in seeking to counter deflationary pressures as investors await commentary from a Federal Reserve meeting in Washington. Australia’s core consumer prices rose more than forecast last quarter, easing pressure on the central bank to further reduce record-low interest rates. Post-market gains in Apple and Yahoo! Inc., which announced a spinoff of its stake in Alibaba Group Holding Ltd., came after the biggest drop in the Dow Jones Industrial Average in three weeks.

Singapore’s move “was prompted by similar moves by the Swiss, Canadians and the Indians and weakening commodity prices,” Song Seng Wun, an economist at CIMB Group Holdings Bhd. in Singapore, said by phone. “Core inflation the last few months has been running below forecast and with the dollar projected to remain strong, they decided to move a little bit earlier rather than wait for April.”

Currency Basket

The Singapore dollar dropped to as low as S$1.3569 per greenback, its weakest intraday level since August 2010, before trading at S$1.3513. In its unscheduled policy statement Wednesday, the Monetary Authority of Singapore, which uses the currency as its main policy tool, said it will reduce the slope of the policy band for the city state’s dollar. It also cut the inflation forecast for 2015.

The MAS guides the local dollar against a basket of currencies within an undisclosed band and adjusts the pace of appreciation or depreciation by changing the slope, width and center of the band. Singapore’s consumer prices fell for a second straight month in December.

While the U.S. Fed has ended its so-called quantitative easing program, the Bank of Japan boosted its record stimulus at the end of October and the European Central Bank unveiled a 60 billion euro ($68 billion) a month asset-purchase policy on Jan. 23.

Policy Changes

The Swiss National Bank abandoned its attempts to cap the franc’s appreciation against the euro on Jan. 15, sending shockwaves through global markets and causing disastrous losses for speculators. The Danish central bank, which cut interest rates twice last week, said it will defend its peg, while the Bank of Canada and Reserve Bank of India unexpectedly reduced their benchmark rates this month.

The Aussie gained 1 percent to 80.17 U.S. cents, rising for a third straight day. Data showed a measure of underlying inflation rose 0.7 percent in the fourth quarter from the previous three months, exceeding the 0.5 percent increase predicted by economists in a Bloomberg survey.

The euro weakened 0.1 percent to $1.1374 and the yen traded at 117.90 per dollar after slipping to 118.26 earlier. China’s yuan hit a record discount to the central bank’s reference rate.

Norway’s krone slipped 0.3 percent. The oil-exporter’s currency is down 20 percent in the last six months, the most of any G-10 country. Of 31 of the world’s most-traded currencies ranked by Bloomberg, only Russia’s ruble, which has almost halved in value, and Colombia’s peso have weakened more in the period.

Asia Stocks

The MSCI Asia Pacific Index traded near its highest close since September as the S&P/ASX 200 Index in Sydney advanced 0.1 percent and Japan’s Topix index added 0.3 percent. South Korea’s Kospi index climbed 0.5 percent.

Chinese shares declined, with the Shanghai Composite Index slipping 0.9 percent after falling as much as 1.5 percent. A gauge of mainland companies listed in Hong Kong was little changed, while the Hang Seng Index climbed 0.3 percent.

Fed officials are trying to determine whether declining oil prices, a slowdown in European growth and any fallout from the Greek elections will threaten the U.S. recovery as it considers raising interest rates.

Chair Janet Yellen told reporters after the last meeting not to expect higher borrowing costs before the end of April.

Apple climbed to $115.40 in the post market, after closing down 3.5 percent at $109.14 in ordinary trading. Yahoo shares jumped as much as 10 percent in extended trading after its announcement, which will see Yahoo’s stock in Alibaba put into a newly registered firm called SpinCo. Yahoo also reported fourth-quarter earnings-per-share of 30 cents, just above the 29 cents predicted by analysts.

U.S. Futures

Futures on the Standard & Poor’s 500 Index climbed 0.7 percent, signaling the gauge will rebound after dropping 1.3 percent on Tuesday. Dow futures advanced 0.5 percent following the stock gauge’s 1.7 percent slump.

West Texas Intermediate for March delivery fell 1.4 percent to $45.58 a barrel after gaining 2.4 percent last session. Oil rallied on Tuesday as the dollar weakened and OPEC warned that prices may surge without new investment in production. Brent slid 1.2 percent to $49.01 a barrel in London.

Copper in London rose 0.5 percent, rebounding from the biggest loss in almost two weeks, and zinc advanced 1 percent after the LMEX Index of six main metals on the London Metal Exchange fell 2 percent on Tuesday. The Bloomberg Commodity Index was 0.5 percent weaker today.

Commodities will lag behind equities, bonds and credit markets over the next three months before a rebound in oil sparks a recovery, according to Goldman Sachs Group Inc., which cut its near-term outlook for raw materials to “underweight,” predicting losses of 10 percent.

PROPERTY LAUNCHES & INVESTMENTS

Property Launches & Investments

Singapore Dollar Sinks on Easing as U.S. Futures Advance

Currency Basket

Policy Changes

Asia Stocks

U.S. Futures

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