CAD/SGD is a popular trading instrument among market participants. It is a cross currency pair, meaning it does not contain the US dollar. Nevertheless, the greenback has a significant influence on the instrument. A possible movement of CAD/SGD can be seen by comparing the trading charts of the two currency pairs, CAD/USD and USD/SGD.

Features of CAD/SGD

Canada is one of the leading exporters of crude oil. For that reason, any changes in global oil prices affect the Canadian dollar. There is a direct correlation between fluctuations in oil prices and the loonie’s exchange rate, which is also reflected in the price of CAD/SGD. This currency pair has its distinct features. At the same time, it is not a highly volatile instrument.

Nowadays, the Singapore dollar is considered one of the world’s most stable currencies. The Singapore economy (one of Asia’s 4 most developed countries) boasts a low inflation rate, large foreign exchange reserves, and high export volumes. Singapore exports products such as household appliances, information technologies, medicines, and shipbuilding equipment.

Aspects of trading CAD/SGD

When trading CAD/SGD, it is important to remember that the spread for transactions in cross currency pairs, like CAD/SGD, is often higher than for major and more popular forex pairs. Therefore, traders should consider carefully the broker’s trading conditions before entering the market.

Importantly, both currencies are greatly affected by the US dollar. For that reason, to make an accurate forecast for the pair, it is essential to analyze the major US economic indicators, including interest rates, GDP, unemployment, Nonfarm Payrolls, and so on.

At the same time, the Canadian dollar and the Singapore dollar can react to changes in the state of the US economy in a different way.

Above all else, it is important to analyze economic reports published in Canada and Singapore. For instance, exports data has a significant impact on the exchange rate of the Singapore dollar.