EURSGD Forecast highlights:
- EURSGD amidst a medium-term downtrend due to Euro weakness; but support noted at 1.400
- Oversold, a rebound from here is a possibility
- Watch to buy some Euros at round number level (1.400)
How has EURSGD performed recently?
Unlike USDSGD or GBPSGD, the Singapore Dollar has been making consistent gains against the Euro.
This is largely driven by weaknesses in the European currency. During 2021-2022, the rate crashed from 1.520 to 1.380. Following a multi-month rebound (to 1.490), the rate has slumped to 1.400 once more in recent months.
The question now is, will we see a rebound from here?
EURSGD’s decline is somewhat oversold, whilst prices are slowly picking up demand near the 2022 lows. Sellers tested the 52-week low at 1.390 a few times and failed to generate a decisive downside breakout.
Therefore, from the risk-reward perspective, a counter-trend rally here is not to be dismissed. A small rebound, however, will not break the medium-term bear trend from 1.470. That would require a sharp rally above 1.420 to overturn the negative posture.
Is it a good time to buy the Euro?
If holders of SGD need the Euros now, the current rate may not be a bad price to exchange SGD for EUR.
The FX rate is near 24-month lows and some tentative support is slowly emerging at around 1.400. Prices could bounce around this area.
Of course, SGD holders may wish to wait further to achieve a better price. But that strategy entails some price risk as the rate, after a 6-month decline, may rebound (to, say 1.420).
Buying some Euros now (around 1.400) and wait to see if better exchange rates are available later could be an alternative tactic.
Will the Euro get stronger?
The Euro is having a difficult time these days because of weakening economic growth outlook. The IMF estimates that, in 2025, the Eurozone is expected to grow just 1.0 percent (real)
The European Central Bank senses that the Eurozone economy is facing headwinds and in the latest monetary meeting, lowered the policy rate by 25bps. This is the fourth consecutive rate cut.
Whenever a central bank cuts rates sharply, it usually causes the currency to weaken somewhat.
In comparison, the Singapore central bank (MAS.gov.sg) is maintaining its monetary policy with few drastic changes on the exchange rate front (through S$NEER).
Therefore, for the Euro to strengthen markedly from here would require a drastic change in the macro outlook of the Eurozone. The catalyst for this outlook shift remains notably absent.
What is the EURSGD forecast in weeks?
According to the local banking group OCBC, EURSGD is expected to stay around the current level in the months ahead, before staging a rebound above 1.420 at the end of the year.
Even the lowest forecast level is just at 1.3988 (Mar-25). So it appears that the downside potential of EURSGD is fairly limited.
But we all know that exchange rates are highly dynamic. The potential for large swings in the values of EURSGD is high, especially when macro uncertainties are rising by the day. The US just threatened a 25 percent increase in tariffs on EU products.
Therefore, one has to keep a close watch on the exchange rate in search of potential trading opportunities.
Source: OCBC (Feb 2025)
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Previously Jackson was the director of Stockcube Research as Head of Investors Intelligence. This pivotal role involved providing market timing advice and research to some of the world’s largest institutions and hedge funds.
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