THE US dollar will remain vulnerable in the short term after falling to record-lows against the yen and the deutschemark last Friday. 'There is no strong reason to buy the dollar at the moment, while the yen and mark have become the reserve currencies,' said Stanley Wong, treasurer of Standard Chartered Bank (HK). The dollar has been the world's reserve currency for a long time, but it has become consistently weaker of late and will find it hard to regain its status in the short-term. On Friday, the dollar fell to 86.34 yen after panic selling on the European and Asia markets. However, Mr Wong expects it will dive further to 85 yen and 1.35 deutschemarks this week. The outlook is bleak. 'Every sign of recovery will provide a selling opportunity on the dollar and it has got no friends now,' said Bob Bunker, general manager of BNP International Financial Services. Mr Wong explained that the weakening dollar was one of the US Government's tactics to improve its trade deficit against Japan and there would not be much impact on the living standard of Americans. However, it will create difficulties for Hong Kong people as the local currency is pegged to the greenback. Although Hong Kong's major trade partner is China, imported inflation would be brought in by the yen's appreciation, he said.