EUR/SGD Outlook:
Slightly positive, but likely to move sideways; the rate is near its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The European Central Bank (ECB) is maintaining interest rates, while the Monetary Authority of Singapore (MAS) is shifting toward a more accommodative stance.
• Risk/commodities: Oil prices have recently risen sharply, impacting the euro due to its global trade connections, but this may not significantly affect the SGD at this moment.
• One macro factor: The eurozone’s inflation has fallen below the ECB's target, raising questions about potential future rate cuts, while Singapore's economy is showing resilience with robust growth.
Range:
EUR/SGD is expected to hold steady within its recent 3-month range, given the mixed signals from economic indicators.
What could change it:
• Upside risk: A stabilizing geopolitical situation in Europe could enhance investor confidence in the euro.
• Downside risk: Further monetary easing by MAS could strengthen the SGD against the euro.
