Market Outlook for the Singapore dollar
22-February-2019: 2018 was a steady year for the Singapore dollar: on balance it gained value, but it did lose out slightly against the world’s reserve currency, the US dollar.
2019 has begun reasonably well. Entering the final week of February, SGD was a percent higher year-to-date versus USD, but at US$0.74 was in line with its 2018 average rate. SGD was 2 percent higher year-to-date against EUR at a 9-month closing high of €0.653 — 4 percent higher than 2018’s average.
Against AUD, in February, SGD was unchanged year-to-date but was 4.5 percent higher than last year's average, at A$1.038. During a flash crash on January 3rd, SGD/AUD briefly traded at a 10-year high of A$1.088.
With Singapore being a small, trade-dependent country, prime risks to SGD for 2019 include the re-emergence of trade tensions between China and the US, and/or a serious global economic slowdown.
Traders, though, were happy to bet against the above risks and on SGD appreciation at the time of this report: a Reuters survey in February showed “long” SGD positions among bank traders rising to the highest level in 10 months.
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US dollar Market Outlook
The US dollar had been falling steadily in the lead-up to the March-20 Fed meeting, and those that were selling the currency amid speculation of a dovish surprise were entirely vindicated after the central bank ditched its December projection for two 2019 interest rate hikes and said it now sees rates unchanged until 2020.
The extent of the Fed’s dovish turn meant that the dollar suffered a rapid and significant correction. The euro leapt on the new projections to a 6-week high against the dollar of $1.145 and other major and emerging market currencies followed suit.
The Fed’s reassessment of future monetary policy reflects concerns over domestic and global economic growth, as well as inflation and risks originating overseas, likely including Brexit.
Earlier this year, ING said the dollar would soon “embark on a gradual long-term bearish trend.”
CIBC said: “A slowdown in the economy is likely to weigh on USD particularly in the second half of this year.”
Compare SGD-USD Exchange Rates.
Foreign Exchange News
Revolut, a digital bank that allows users to receive, send and spend money at the interbank exchange rate, should be ready for its Singapore beta launch in March 2019, the company has said.
27 Feb, 2019 by
The Singapore dollar weakened on Tuesday but is forecast to be the best performing Asian currency in 2019. In Europe, political uncertainties have driven funds into the Swiss franc, elevating its price. The SNB has re-affirmed its commitment to market interventions, which means EUR/CHF at Fr1.1 will be a difficult nut to crack.
8 Jan, 2019 by
A Reuters survey of investors this week has shown increased bearishness on the Indonesian rupiah, Singapore dollar and Indian rupee. Each of the Asian currencies has lost value this year amid concerns for global trade and following emerging market currency crises in Argentina and Turkey.
24 Aug, 2018 by
The Australian dollar has been among the hardest hit of major currencies in recent months. Heavy losses since January have been widely reported in the financial press, with most commentaries focusing on the Aussie’s 8.6 percent decline against the US dollar to levels around 0.745; but the Australian dollar has, of course, suffered elsewhere, and […]
23 Feb, 2019 by
Euro Market Outlook
Between November and February, the euro was remarkably stable relative to the US dollar, against which it traded for the most part between $1.125 and $1.155. In the days leading up to this report, in March, the euro broke downwards to a 21-month low of $1.118.
Further to Brexit uncertainty, euro weakness followed March’s meeting of the ECB, at which the central bank said it will not raise interest rates until 2020 at the earliest as part of an effort to lift the eurozone economy out of this “period of continued weakness.”
ING analysts wrote in March that they expect the low-yielding euro to continue to depreciate against the dollar over the coming months. Danske Bank predicted a euro dip towards $1.1 before a rally over 3-6 months back into a $1.12-1.16 range.
Compare SGD-EUR Exchange Rates.
Reviews – Money Transfer Providers
TransferWise has been making waves in the global payments market since it came on the scene back in 2011 and is undoubtedly one of the best services for sending money across borders.
Updated: 20 Mar, 2019
TransferWise’s Borderless Account allows users to hold and convert funds in 40 different currencies, and send and spend internationally, all at the “real” exchange rate and with the low fees that TransferWise is renowned for. Users can also receive major-currency payments free of charge.
Updated: 20 Mar, 2019
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Australian dollar Market Outlook
Following a flash crash in early January, which saw the Australian dollar briefly trade at a 10-year low of $0.674, the Aussie recovered to $0.73, but then, as it had done before the flash crash, it commenced with a slow and steady decline, and it was back at $0.705 in mid-March and was predicted to fall further.
In February, HSBC predicted a year-end AUD/USD rate of $0.66. In March, Westpac and JP Morgan were slightly more upbeat and argued for $0.68.
Fuelling lower exchange rate forecasts is the Australian economic story, for which major themes include a housing market slump, Chinese growth and the US-China trade spat. The RBA slashed growth forecasts in February and markets are now pricing in 1-2 interest rate cuts this year.
Another Aussie exchange rate worth mentioning is AUD/GBP, which sank in mid-March to its lowest level in nearly 3 years, at just £0.53. The Australian dollar has been unable to compete with the pound of late, since the latter benefits every time the British government fails to make a decision on how to deliver Brexit (every time Brexit appears less likely or to be delayed).
Compare SGD-AUD Exchange Rates.
Fintech FX News
Ant Financial, the Chinese fintech giant that recently acquired WorldFirst, has set its sights on Europe, where it plans to take its share of both cross-border and point-of-sale payments.
Updated: 19 Mar, 2019
Amid declining interest, the Chicago Board Options Exchange, or CBOE, has announced it will no longer offer bitcoin futures contracts once current contracts expire in June.
Updated: 19 Mar, 2019
Digital bank Revolut announced this week the introduction of a significant new feature: auto currency exchange based on targeted exchange rates.
Updated: 8 Mar, 2019
Users of popular messaging apps, including WhatsApp and Line, might soon be able to make cross-border payments effortlessly. In a move that will further disrupt the payments industry, the creators of such apps, including Facebook, are working hard to develop their own digital currencies that can be transferred to anyone in a user’s contact list.
Updated: 19 Mar, 2019
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