SGD/EUR Outlook: Neutral, as the exchange rate is near its recent average and trading in a stable range with mixed influences.
Key drivers:
• The Monetary Authority of Singapore has opted for a steady monetary policy, maintaining its stance amid moderate inflation expectations, which supports the Singapore Dollar.
• The Eurozone is witnessing subdued economic conditions, with the European Central Bank hinting at easing measures, placing downward pressure on the Euro.
• Oil prices are trending near recent highs, which can impact currency values; the increase may lead to higher costs that affect both economies differently.
Range: SGD/EUR is likely to hold its position within the stable 1.6% range previously observed, without significant upward or downward volatility.
What could change it:
• Upside risk: A substantial improvement in Singapore’s economic growth could strengthen the SGD.
• Downside risk: Any negative economic data from the Eurozone, particularly regarding GDP growth, could further weaken the Euro.
