Singapore dollar at 3-week low; more downside seen

PHOTO: Singapore dollar at 3-week low; more downside seen

SINGAPORE - The Singapore dollar slid to a near three-week low against the US dollar on Monday as traders said hedge funds unloaded the local unit amid expectations it could depreciate further after breaching key chart support lines.

The city-state's currency lost 0.3 per cent to 1.2444 to the greenback, its weakest since Feb. 12 and breaking through a 200-day moving average at 1.2398 and a 55-week moving average at 1.2439.

It stood at 1.2440 as of 0332 GMT.

The Singapore dollar's weakening comes at a time the US dollar stayed close to a six-month high against a basket of currencies.

The greenback's strength caused stop-loss selling of the Singapore dollar, while some leveraged funds and interbank speculators covered short positions around 1.2450, limiting its downside for now, traders said.

But investors were looking to sell the local currency on rallies as it ended daily sessions softer than the 200-day average twice, traders and analysts said.

On Feb. 21 and March 1, The Singapore dollar closed daily sessions weaker than the chart support.

"Note that the USD/SGD has departed from its 200-day MA with the next upside objective potentially expected at around 1.2470 in the near term," OCBC Bank said in a note.

The Singapore has the 38.2 per cent Fibonacci retracement at 1.2465 of its appreciation between June and October 2012.

The city-state's currency has lost 1.8 per cent against the US dollar this year, according to Thomson Reuters data.