The rates continue within the upward trend. However, its intensity has been lost. Now we can see signs of a weak downtrend formation. Actually, the SGD gradually began to strengthen half a year ago and during this time increased in price by 5%. For a long time the euro has been declining due to rising tensions in international trade and a slowdown in economic growth in the EU.
This week, unexpectedly, the euro was influenced by another negative external factor: the rapid fall of the Turkish lira. This caused panic on the financial markets, given that Turkey's foreign debt to the EU is 150 billion dollars. With the fall of the Turkish lira and the economic crisis in Turkey, it is likely that this debt will become irrevocable or at least problematic. The ECB has also expressed fears about the large banks of France and Italy, which are major creditors for Turkey. In addition, there's a danger for a number of enterprises exporting a significant part of their products to Turkey. As a result, the value of the euro fell significantly against most currencies.
The latest economic statistics are quite acceptable for investors. In particular, the GDP in the eurozone grew by 2.2% in Q2, which is in line with forecasts. However, the growth of the EU economy is achieved mainly thanks to the German economy, while in other EU countries the slowdowns in economic growth continue.
The situation in the economy of Singapore is even more doubtful than in the EU: a disturbing signal for investors was the data about Singapore's GDP, which grew in the second quarter by only 0.6%, while a twice higher significant growth by 1.3% was expected. Perhaps the data on the trade balance will be more impressive for the SGD. It is currently trading near the lowest values for the last 13 months, and its recent strengthening was only due to the negative impact of TRY on the euro.
Oscillators (Stochastic, RSI, MACD) unanimously point to the rates in the oversold zone. We expect at least a price correction in favor of the euro. Upon long-term trading it is also possible to make short deals, but the rapid strengthening of the SGD is not expected, even against the weakened EUR.
