*Singapore widens trading band for Singapore dollar
*Aussie soars near parity against USD
*Dollar index slips to 9-month low
By Hideyuki Sano
TOKYO, Oct 14 (Reuters) - The dollar hit a nine-month low against a basket of currencies while the Australian dollar rose to a fresh 28-year high on Thursday on mounting expectations of more monetary easing from the United States next month.
Traders said selling in the dollar accelerated after Singapore's central bank said it would slightly increase the trading band of the Singapore dollar.
The Monetary Authority of Singapore (MAS) sets policy by managing the Singapore dollar in a secret trade-weighted band against a basket of currencies, instead of setting interest rates.
"Selling momentum in the dollar seems to be much stronger today than yesterday. The MAS's action also triggered more dollar selling," said Minoru Shioiri, forex manager at Mitsubishi UFJ Morgan Stanley Securities.
The Australian dollar, with its high yield and the economy's link to commodities, led the gains on Thursday as many traders saw a rise to party with the U.S. dollar as just a matter of time.
The Australian dollar gained more than 0.6 percent to $0.9972, its highest in 28 years.
Some resistance is expected at $1.000, where option barriers are said to lie, although many think the Aussie is set to hit parity soon given the overwhelming weakness in the U.S. dollar.
The euro was up 0.6 percent at $1.4041, after rising as far as $1.4058, its highest in more than eight months.
The dollar also eased 0.3 percent against the Japanese yen to 81.60 yen, edging toward a 15-year low of 81.37 yen hit earlier this week.
The dollar index fell 0.5 percent to a nine-month low of 76.652.
The U.S. dollar fell 0.8 percent against the Singapore dollar to S$1.2896.
Still, a growing number of market players also said that financial markets may have already priced in quantitative easing by the Federal Reserve early next month and that the dollar's decline may soon have run its course.
"Speculators will perhaps start closing their dollar short positions before the next FOMC meeting (on Nov. 3), which could keep the dollar in recent trading ranges in the next few weeks," said Tsutomu Soma, senior manager of foreign securities at Okasan Securities. (Additional reporting by Masayuki Kitano; Editing by Edmund Klamann)