SEOUL, Oct 14 — The Singapore dollar turned higher today as the central bank kept its tight policy stance with stronger-than-expected third quarter growth and warned of higher core inflation, while most emerging Asian currencies eased.

The city-state’s currency was quoted at 1.2457 per US dollar as of 0410 GMT (1110 Malaysian time), compared with Friday’s close of 1.2460.

The Singapore dollar stood at 1.2474 before the Monetary Authority of Singapore stuck to its stance of allowing “modest and gradual” appreciation of the currency as expected.

The local dollar found more support as the trade-dependent Southeast Asian city-state reported better-than-expected 5.1 per cent growth in third quarter gross domestic product from a year earlier due to continued strength in services.

“We would not describe today’s statement as hawkish but cautiously optimistic and inherently sanguine,” said Emmanuel Ng, a foreign exchange strategist for OCBC Bank in Singapore, referring to the MAS’s policy decision.

“Any risk in April would be towards a tightening, but this would have to be strongly predicated on a steady and uninterrupted recovery in global growth prospects in the next six months,” Ng added.

The Singapore dollar is seen having a chart resistance around 1.2450, but it may head to 1.2423, the high of September 19, once the level is broken, analysts said.

The next level would be 1.2408, the 76.4 per cent Fibonacci retracement of its depreciation between May and August, they added.

“Investors are likely to buy the Singapore dollar around 1.2480-1.2490 as there is no rational to sell it,” said a foreign bank trader in Singapore.

“For now, it looks difficult to chase the Singapore dollar here, given the US debt issue,” the trader added.

Most emerging Asian currencies and regional shares fell as a possible US debt default loomed after the failure of weekend talks in Washington, though expectations are that a last-minute compromise will be reached.

The Indian rupee slid before September inflation data due later in the day.

The Thai baht also slid, tracking weaker local stocks.

Won

The won eased on dollar demand from local importers amid caution over possible intervention by the foreign exchange authorities to stem its appreciation.

The South Korean currency’s downside, however, was limited as foreign investors extended their buying spree in Seoul’s main exchange to a 32nd consecutive session.

“The won is under some pressure from early dollar demand from oil importers. But it is hard to find any clear direction now,” said a South Korean bank trader in Seoul. — Reuters