SGD/EUR Outlook:
The SGD/EUR rate is slightly positive, but likely to move sideways as it trades just above its recent average and remains in the mid-range of its 3-month fluctuations.
Key drivers:
• Rate gap: The Monetary Authority of Singapore has adopted a more accommodative monetary policy while the European Central Bank has maintained its interest rates, affecting the attractiveness of both currencies differently.
• Risk/commodities: With oil prices currently above average, this could influence the SGD positively by strengthening Singapore's trade performance.
• One macro factor: The recent resilient growth in Singapore's economy, which exceeded expectations, supports the SGD against the EUR.
Range:
Expect the SGD/EUR to hold steady within its recent range, showing minimal fluctuations while remaining just above the 3-month average.
What could change it:
• Upside risk: A significant improvement in global economic conditions could strengthen the SGD further.
• Downside risk: Renewed geopolitical tensions in Europe could weigh more heavily on the EUR, pushing the rate downwards.
