US dollar drops, gold jumps after Singapore news

The U.S. dollar tumbled to a 10-month low on Thursday after Singapore unexpectedly tightened policy to let its currency rise, lifting Asian stocks and copper to two-year peaks and gold to a record high.
The dollar's decline against a basket of major currencies and to near parity against the Australian dollar underlined global currency tensions that have sparked a war of words among policymakers.
The dollar dropped to a new 15-year low against the yen.
"'Currency war' rhetoric is on the rise ahead of the G20 and becoming increasingly complex. The context for this is ultra-loose U.S. monetary policy and potential emerging market asset bubbles," Standard Chartered analysts said in a note.
With the next Federal Reserve policy meeting, at which the central bank may announce more asset buying with newly printed dollars, and the next meeting of G20 officials still weeks away, the well-worn trade of selling dollars to buy emerging market stocks, commodities and longer-term bonds was still in play.
Singapore's monetary authority tightened policy, which it manages through a secret band in which its currency is allowed to trade. The news prompted the U.S. dollar to fall broadly, pushing up the euro to an eight-month high around $1.4083.
"It is a pre-emptive move," Chua Hak Bin, an economist with Bank of America Merrill Lynch, said of the Singapore decision.
"Another Fed package would have brought interest rates even lower and driven more capital flows into Singapore."
The Australian dollar was at US$0.9970, up 0.7% on the day and within sight of parity, something not seen since 1982.
Australia's currency, which has benefited from having relatively high yields among G10 currencies, has risen 9.3% since September.
The falling U.S. dollar lifted gold prices 0.4% on the day to $1,376.60 an ounce, a record high, and copper traded on the London Metal Exchange up more than 1 percent to $8,470.25 a tonne, its highest since July 2008.
Climbing commodity prices have been a boon for resource-related shares and the materials sector gave the biggest lift to MSCI's index of Asia Pacific stocks outside Japan.
It was up 1% to the highest since June 2008, having risen 14% since September.
Japan's Nikkei share average led gainers in Asia, up 2%. Resource stocks led the rise, although analysts said the yen's strength would limit the market's upside potential.