SINGAPORE, Jan 18 — The Singapore dollar climbed to a new record high against the Malaysian ringgit early this morning, reaching as high as S$1 to RM3.1474, showed Bloomberg data.

But at 8am, the exchange rate had eased back to S$1 to RM3.1379.

Most Asian currencies rose yesterday in a move that traders said was likely driven by position squaring ahead of a series of potentially market-moving events over the next several days.

DBS Senior Currency Strategist Philip Wee told TODAY that the hike in the Singapore dollar against the ringgit yesterday spoke more of the strength of the Singapore currency rather than significant weakening in the ringgit.

According to Reuters data, the Singapore dollar gained 0.6 per cent against the US dollar yesterday, while the ringgit rose by 0.01 per cent.

Analysts at Citi said they would expect the Singapore dollar to outperform in any bouts of US dollar weakness.

"In Asia, our FX flows data suggest that real money investors’ extreme short SGD position could be another casualty of the ongoing position squeeze, or if conviction in the long USD view softens even temporarily,” they wrote in a research note.

Asian currencies have risen broadly so far in January, with some of those gains coming after a news conference by US president elect Donald Trump last week offered little clarity on his fiscal policies and disappointed dollar bulls.

Yesterday, the US dollar took another tumble after Trump told The Wall Street Journal that he favoured a weaker dollar. — TODAY