01 Dec 2020 23:42
The CAD/SGD currency pair is quite popular among the Forex traders. This pair is the cross rate against the U.S. dollar. As you can see, there is no U.S. Dollar in the CAD/SGD pair, nevertheless it still affects them greatly. To make it clear, just combine two charts (CAD/USD and USD/SGD) in the same price chart and you will see the approximate CAD/SGD chart.
The U.S. dollar has a considerable influence over these two currencies. So for a better forecasting of the future rate of this financial instrument, it is important to consider the main indicators of the U.S. economy. These economic indicators are the interest rate, GDP, unemployment, new workplaces indicator and many others. The Canadian dollar and the Singapore Dollar can react in a different way to any economic changes in U.S.A.
Due to the fact that Canada is one of the leading world oil exporters, its national currency is deeply dependent on the world oil prices. Therefore, when the oil prices are increasing, the Canadian dollar value is getting higher and vice versa. So the CAD/SGD currency pair rate is in direct proportion to the world oil prices.
This currency pair is rather exceptional, and its rate movement is steady. Today the Singapore dollar is one of the most stable currencies in the world. Singapore has a very low inflation, high levels of foreign exchange reserves, and high volumes of export compared to import level.
Singapore is industrial and economically developed country with high level of living standards. The country has a great advantage of its geographical location at the crossroads of the main shipping routes. Thanks to this location Singapore can actively trade with all the most developed countries in the world. Singapore exports home electronics and information technology products, pharmaceuticals, shipbuilding products and also provides financial services. So the export seriously affects both the economy of this country and its national currency.
Singapore belongs to the group of four Asian countries with the highly developed economies also known as "Asian tigers" or “Asian dragons”. The rapid development of its economy allowed Singapore to reach the economical level of the world most developed countries such as the USA, Germany, France, Great Britain, etc.
If you trade cross rates, you should keep in mind that spread for this financial instrument can be higher than for more popular currency pairs. So before you start dealing with the cross rate currency pairs, study properly the broker’s conditions of trading with specified trade instrument.