Dollar creeps higher in cautious trade

NEW YORK: The dollar edged higher Friday as traders grew more cautious amid rising Middle East tensions, which added to worries about the eurozone debt crisis and the US fiscal cliff.

The euro fetched $1.2741 at 2200 GMT, down from $1.2778 late Thursday, and slipped to 103.60 yen from 103.69 yen.

The dollar strengthened against the Japanese currency, buying 81.31 yen compared with 81.16 yen a day earlier.

The euro managed to trim its losses Friday in late New York trade but continued to weaken against the dollar as concerns about the eurozone's festering debt crisis drove investors away from assets deemed riskier, such as the European currency.

And despite encouraging remarks by leaders of the US Congress, both Democratic and Republican, following discussions with President Barack Obama on averting the harsh tax hikes and spending cuts slated for January 1, "the fears over these negotiations continue to fuel risk aversion," said Charles St-Arnaud at Nomura.

"An agreement always takes longer" than politicians would like people to believe, he added.

Escalating border clashes between Israel and Palestinians in the Gaza Strip raised global uncertainty, reinforcing fears the world economy could be hurtling toward another crisis, said Joshua Mahony at Alpari UK.

The dollar firmed to 0.9452 Swiss francs from 0.9423 francs late Thursday.

The pound, meanwhile, picked up against the greenback, buying $1.5880 compared with $1.5859 a day earlier.

"The bullish sentiment surrounding the greenback may get carried into the following week as a growing number of Fed officials speak out against tying monetary policy to specific fundamental goals," said David Song at DailyFX.

Singapore economy to slow to 3% in 2012: MAS survey

SINGAPORE - Singapore's economy will grow by 3.0 per cent in 2012, slowing from an expected 5.2 per cent in 2011 as the global economy and financial services sector cool, according to central bank's survey of private economists released on Wednesday.

The median forecast is at the upper end of the government's growth forecast range of 1-3 per cent for 2012.

The survey also expects the Singapore dollar to strengthen to $1.23 against the US dollar by the end of 2012 from an estimate of S$1.28 by the end of the year. It traded around $1.31 at 0300 GMT.

Asian economies have slowed in recent months, hurt by the euro zone debt crisis that has resulted in weaker demand for the region's exports.


The survey showed that growth in financial services sector in Singapore, which is one of Asia's biggest wealth management centre, is expected to slow to 4.2 per cent in 2012 from a forecast of 9.4 per cent in 2011.

According to the Monetary Authority of Singapore's (MAS) latest Survey of Professional Forecasters, economists now expect inflation in the city state to ease to 3.1 per cent next year from 5.1 per cent in 2011.

Singapore, like many Asian countries, is grappling with high inflation even as growth slows because of troubles in Western countries.

Economists in the survey have cut their forecast for this year's growth slightly to 5.2 per cent from 5.3 per cent in the previous survey in September.

Gross domestic product (GDP) growth in the October-December quarter of this year is now expected to be 4.4 per cent year-on-year, compared with 5.9 per cent in the previous survey.

For 2012, growth in financial services is expected to slow to 4.2 per cent from a forecast of 9.4 per cent in 2011.

Last month the Singapore government warned that the city-state's economy could contract in fourth-quarter growth, while 2012 GDP growth is likely to slow due to the weakness in the western economies.