The rates continue in the frames of a weak downward trend which was formed in September. Political risks in the Eurozone allowed the Singapore dollar to strengthen against the euro, though during October amid weak economic statistics from Singapore the euro moved to increase against the SGD.
This week the strengthening of the Singapore dollar continued with renewed vigor. On Thursday investors' attention was focused on the ECB meeting and Mario Draghi's speech. According to the results of the ECB meeting, the euro weakened against major currencies. The ECB left interest rates unchanged and Mario Draghi noted that the rate will not change in the foreseeable future. In addition, the ECB decided to extend its bond-buying program until October 2018, though they reduced the volume of monthly redemption of eurobonds to €30 billion from January 2018.
Thus, the ECB continues its softer than expected policy. Investors expected that the program of bonds redemption will be completed in December. In addition, considering the optimal economic indicators in the eurozone and the positive forecast about the the future growth of the economy by the ECB, the rate could be reviewed.
Positive economic statistics about the Singaporean economy published on the same day also impacted the strengthening of the SGD, making it even more significant. In particular, the inflation rate in September remained at the same level for the third month in a row at 0.4%, in line with investors' expectations. The manufacturing volume production in September rose by 14.6%, exceeding investors' expectations by 4.6%.
The Stochastics and RSI oscillators indicate the rates are in the oversold zone, which confirms the high probability of a price correction. The euro really has a chance to stabilize and to regain its lost levels. On Tuesday we expect important economic data from the eurozone about the GDP and consumer price index for October. Therefore, the most optimal at the moment would be the deals to BUY.
