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US dollar weakens further against Singdollar

The United States dollar has weakened further against various currencies, including the Singapore dollar - with softening expected again.

Analysts say the slide started when the US Federal Reserve last week flagged more gradual than expected interest rate rises. The greenback slid 0.3 per cent to $1.3963 from Monday's close of $1.3967 - the first time the Singdollar had cracked the 1.40 floor against the greenback since Feb 28.

Economists told The Straits Times that the US dollar weakness against the Singdollar is likely to persist in the short term.

United Overseas Bank economist Francis Tan said: "We expect more downside for the US dollar-Singdollar pair in the next couple of weeks, with the support level likely around $1.38."

CIMB Private Bank economist Song Seng Wun attributed the dollar's weakness largely to the Fed's considerably less hawkish tone compared with the Bank of England and European Central Bank.

He said: "There is the anticipation that BoE and ECB may be done with the easier monetary policy and that the next turn is up, rather than down.

"If the US continues with a more gradual approach, then traders could take some of the money off the table from the dollar side."

Economists do not expect the Singdollar to break below the $1.38 mark to the greenback any time soon, barring a surge in the Republic's economic growth and core inflation.