The dollar resumed its weak tone against other key currencies in afternoon Asian trade on Wednesday as investors bet the Federal Reserve will further cut interest rates to lift the economy, making dollar assets less attractive. "The US needs a weak dollar and lower interest rates to help the economy," said Mark Wan, chief analyst at Hang Seng Investment Services Ltd. The US Commerce Department yesterday reported that housing starts fell to their lowest level in 17 years because banks were hesitant to extend mortgage loans amid rising defaults. A slump in the uS housing and financial sectors, declining consumer spending, the rising jobless rate and weak manufacturing have raised fears that the world's biggest economy is already in recession. "Unless the housing sector recovers, the dollar will remain under pressure. The housing sector is the origin of the whole problem," said Wan. "I don't see any positive economic data coming out of the US that will support the dollar." The euro will rise further to a record 1.60 dollars, while the yen may head to the 98-level against the greenback. The Fed on Tuesday slashed rates by 75 basis points, bringing its total reductions to 3 percentage points since it began easing monetary policy in September.