What are the Best Times to Trade Forex in Singapore?
The best time to trade forex in Singapore is between 9 and 12 PM in the evening, as the London and New York markets overlap, creating the best trading conditions.
A currency pair represents the value of one currency relative to another. Because currencies express relative value, they trade in pairs. This ratio represents the price of one unit of currency expressed in another currency.
This value is determined by the market forces of supply and demand for each currency in the pair. For instance, in the currency pair EUR/USD, the euro (EUR) is the base currency, and the US dollar (USD) is the quote currency. If the EUR/USD pair is quoted at 1.20, it means that one euro is equivalent to 1.20 US dollars. Currency pairs provide a standardized way of comparing currencies and conducting transactions, making them fundamental to international trade and finance.
In terms of domestic currency, a common currency pair is USD/SGD, where the US dollar (USD) is the base currency, and the Singapore dollar (SGD) is the quote currency. This concept means the price quoted represents how many Singapore dollars are needed to buy one US dollar. For example, if the USD/SGD rate is 1.35, you need 1.35 Singapore dollars to purchase one US dollar.
Currency pairs usually free float based on various economic factors that impact everyday life in Singapore. If the USD/SGD rate is high, tourists coming from the US will have advantageous purchasing power as they will get more Singapore dollars per unit of the US dollar.
On the contrary, if this rate is high, Singaporeans traveling to the US will get fewer US dollars for Singapore dollars, making the trip more expensive.
While tourism is often used as an example, rate fluctuations significantly impact businesses, influencing costs and profitability.
If a Singaporean owns a business that imports clothes from China, the exchange rate between SGD and Chinese Yuan (CNY) will affect the cost of imports. A stronger SGD than CNY means paying less for imports, creating a competitive edge. Conversely, a weaker SGD would benefit businesses that export goods, as their Singapore-produced goods become relatively cheaper for foreign buyers.
Singapore residents commonly trade several currency pairs due to factors like tourism, trade, and foreign investments. The most popular pairs include:
Several factors influence the movements of currency pairs. Here are three key factors:
A currency pair is the price quote of the exchange between two different currencies. This ratio usually changes based on the supply and demand of these currencies, the monetary policies of their central banks, and other factors.
The first listed currency is the base currency, while the second is the rate currency. For example, a USD/SGD price of 1.35 means that one unit of US dollars is equal to 1.35 Singapore dollars.
Three distinctive currency pair groups exist: majors, minors, and exotics. Majors like EUR/USD or GBP/USD make up the bulk of the foreign exchange market, while the other two groups are less popular and trade in smaller volumes.
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