Tuesday, January 02, 2007

Trend of the Peso and Oil Prices for 2007

OK, since its 2007 now, my earlier prediction of 44 pesos to the dollar did not happen. However, it is now aound 48 to the dollar. A gain of around 8 pesos per dollar since March 2006 when I started predicting the rise of the Peso. If you have 10,000 dollars and converted it to Peso, without leverage like many Forex Traders are doing, then you would have gained around 80,000 pesos in Peso currency appreciation alone.

So what is my prediction for 2007?

The Peso will continue to strengthen, although our government will surely intervene once it reaches 46 to the dollar to protect our exporters. I hope they will not do a Thailand once it approaches 46.

On the other hand, oil prices in the world market will approach the 50 dollar levels in 2007; for the simple reason that refining capacity in some oil producing countries will improve dramatically, unless security or political problems occur in some of these countries.

So? take a second opinion; and trade conservatively.