Cross Euro Singapore Dollar is suitable for professionals who want to use exclusive trading tools.
Cross euro Singapore dollar is quite specific because the ratio of currencies does not have a direct correlation. The euro is tied to the decisions of the European Central Bank and the economic situation in the eurozone, and SGD - to the commercial and industrial turnover of Singapore.
Although the analysis of the instrument is not easy, it can be successfully used to obtain high margins. For most exotic couples, a situation is characteristic when sharp fluctuations in the exchange rate often occur, on which the trader makes decent money.
The EU economy is dependent on several donor countries. Germany comes first, followed by Italy and France. All other states either do not affect the strength of the euro or, conversely, pull the currency down.
To correct the situation, the ECB changes the interest rate eight times a year. If the economy is on the rise, it is growing, and lowering is used to stimulate financial performance.
The interest rate on the euro directly determines the interbank exchange rate. The higher this figure, the stronger the euro. Given the fact that the GDP growth rate of developed EU countries has decreased to less than 1%, it is easy to understand that the euro is weak in 2019.
But specific fluctuations besides the interest rate also depend on the political situation. Brexit dealt a severe blow to the stability of the eurozone and scared away potential investors.
England became a precedent that the EU has avoided by all means since 1999. The country's independent exit from the eurozone indicates that neither the state nor the people see any prospects for themselves in this community.
France could be the next candidate, as the country is literally on the verge of a full-blown revolution. In such circumstances, talking about the strength of the euro is merely pointless.
Although the currency remains de jure stable, in practice, it is subject to tremendous volatility, due to what any of her crosses can potentially bring very high profits. This is especially true for such stable currencies as SGD.
Singapore dollar is the national currency in Singapore. The country's economy is based on production and trade, which makes SGD a reasonably stable asset. The industrial sector offsets fluctuations in commodity prices.
In the early 60s, the state was in its infancy, GDP was based on trade with neighbors and was one of the lowest in the world since the main export was fish.
The Singapore authorities very quickly realized that they could not build a strong economy on this source of income, so they actively began to develop the oil refining complex and the production of electrical goods.
After a couple of years, this paid off; in 1967, the US company Texas Instruments launched semiconductor manufacturing in Singapore. Other major manufacturers followed.
Singapore relied on a preferential tax regime and transparent legislation, which allowed the country to become one of the most developed countries in the world over the next ten years.
Also, during this period, pharmacology, the financial and tourism sectors are actively developing. Which ultimately ensured an annual GDP growth of 7.5% up to the year 2000.
Such a high indicator was achieved due to the development of high-tech industries, such as biotechnology, robotics, and electrical engineering. Besides, the government and the national bank are responsible for the stability of the currency, which regularly intervenes to stabilize the situation.
In the late 90s, the southeast of Asia was struck by the deep economic crisis associated with the collapse of the USSR and the redistribution of spheres of influence. Unlike neighboring countries, Singapore took only one year to not only get rid of the negative GDP but also to return to the previous pace of development.
The beginning of the two-thousandths was marked by another recession associated with a fall in demand for high-tech products. Nevertheless, Singapore was able to orient in this case, switching to the financial sector.
As a result, until 2010-2012, the country's GDP continued to grow by 4-4.5% per year. But after this period, the pace of development has somewhat decreased. This is due to both the unstable economic situation in the world and the decline in trade.
Despite this, Singapore shows very high resistance to adverse economic factors. Therefore, the currency looks very interesting against the background of the euro rushing from one extreme to another.
For successful trading with this tool, you need to monitor the EU news background and predict the behavior of the euro. Against the backdrop of the Singapore dollar, it is appropriate to open medium-term positions, since they are more comfortable and more accurate to be miscalculated.
The pair is sophisticated and not recommended for beginners since technical analysis data often send false signals.