Singapore dollar weakens as GDP data disappoints

Singapore expanded 2% in 2015, trailing official forecast of 2.1% and well below the 2014 rate of 3.3%.

The Singapore dollar weakened further on Wednesday as the Q4 growth data highlighted downside risks to the economy.

USD/SGD rose to 1.4089 from Tuesday's close of 1.4056. The local dollar had weakened 0.45% on Tuesday and is significantly off the three-month high of 1.3859 touched on 11 February.

Against the pound, the SGD has shown strength as Brexit-related uncertainty has pushed the British currency down across Brexit-related uncertainty has pushed the British currency the board.

The GBP/SGD cross has hit a new 2-1/2-year low of 1.9676 against the Singapore dollar on Wednesday, adding up the losses since October to 9%.

As per the data released on Wednesday, Singapore's economic growth rate has fallen to a 7-year low of 2% in 2015 thanks to the slowdown in China and decreasing exports to destinations like the U.S., while the authorities have kept the forecast for the current year.

Weaker oil prices also dampened the outlook for Singapore for which the marine and offshore industry is also a major GDP contributor.

The official forecast for this year is 1-3% but analysts say Singapore's growth rate could fall below 2% in 2016 highlighting risks on the downside.