The Singapore dollar plunged to a three-month low on Tuesday (14 July) as data showed the island economy's annual growth rate dropped to its lowest in three years while broad strength in the greenback was also a drag on the local currency.

The Singapore economy expanded 1.7% from a year earlier in the second quarter of this year, its lowest rate since the first quarter of 2012 and compared to a revised first quarter rate of 2.8%.

On a quarterly basis, the economy contracted 4.6% compared to the upwardly revised 4.2% growth in Q1. Analysts had been expecting more than 2% annual growth and nearly 1% sequential growth in the June quarter.

The USD/SGD rose to 1.3631, its highest since mid-April, and from the previous close of 1.3567. The Singapore currency has fallen 0.47% on the GDP data, adding to Monday's 0.46% decline.

The currency pair had risen to a near five-year high of 1.3940 in March before falling back to a four-month low of 1.3150 in April.

The local dollar has so far weakened 3.5% from the April levels and seems headed for a retest of the March lows.

Technically, the USD/SGD is testing the 61.8% Fibonacci retracement of the March-April selloff.

The important level to watch ahead of a retest of the March level is 1.3750 but 1.3690 and 1.3825 are also worth watching.

On the downside, 1.3550 and 1.3450 are the two immediate levels, the 50% and 38.2% Fibonacci levels respectively. As far as the latter holds, the pair will have its upward momentum intact keeping doors to the March highs open.

Further south, the levels to focus on are 1.3340 and 1.3284 ahead of 1.3150, the 29 April low.

Euro weak, dollar firm

European markets had broadly cheered the new bailout deal accepted by Greek Prime Minister Alexis Tsipras on Monday but the fact that the political road ahead for implementing the agreement is bumpy has weighed on financial markets including the single currency on Tuesday.

The EUR/USD has dropped to 1.0965 from the previous close of 1.1001 while the dollar index has risen to a one-week high of 97.04. The dollar strength has weighed on currencies across the board including Asian units.

In a fresh sign of political turmoil in Athens, an influential Greek minister has asked Tsipras to withdraw the bailout deal agreed in Brussels.

Energy minister Panagiotis Lafazanis termed the new deal as unacceptable saying it "cancels the popular mandate and the proud 'No' of the Greek people in the referendum".