SGD/EUR Outlook:
The SGD is currently trading above its recent average and near recent highs, suggesting a slightly positive outlook. The recent performance indicates ongoing strength against the Euro.
Key drivers:
- Rate gap: The Monetary Authority of Singapore has held a cautious approach to SGD appreciation, contrasting with the European Central Bank's accommodative stance, which keeps EUR under pressure.
- Risk/commodities: Brent Crude OIL/USD trading significantly above its average supports the SGD, as higher oil prices often bolster currencies of net oil-importing nations like Singapore.
- One macro factor: The Eurozone's recent consumer confidence data fell short of expectations, which may limit the euro's potential for a strong recovery.
Range:
The SGD/EUR is expected to hold steady within its recent range but may test extremes if current conditions persist.
What could change it:
- Upside risk: An unexpected improvement in Eurozone economic data could support euro strength.
- Downside risk: Further deterioration in consumer confidence in the Eurozone could lead to a weaker euro.
