Chart of the Day: Singapore dollar feared to slide steeply in 2016

Analysts are “outright bearish” on the SGD.

The Singapore dollar is expected to lose more value against the greenback this year, if its rapid depreciation in the past two weeks is anything to go by.

According to BMI Research, the SGD is now trading near $1.44/USD, with the exchange rate forecasted to rise to $1.48/USD by the end of 2016.

“Multiple factors look set to drag the SGD down further over the near-term, including the accelerating depreciation of the Chinese yuan (a major component of the SGD's trade-weighted basket of currencies) and the continued normalisation of interest rates by the US Federal Reserve,” BMI Research said.

“While we retain our end-2016 forecast on the unit at SGD1.4800/USD, we note that the currency could easily overshoot this target to the downside over the coming months (before consolidating towards the end of the year), and therefore maintain an outright bearish near-term outlook on the SGD,” the report warned.