Sunday, December 16, 2007

Peso 40:$1 next week? or will it break 39 something?

This is a reality every Pinoy, OFW or not, have to face. It is happening as predicted! I am sure many of our OFWs, particularly those in the Middle East, that are earning a meager 500 to less than 1000 dollars a month are already edgy, fretting, and frustrated. Many of them, I am sure are contemplating packing their bags and going home, either for good or just for the Christmas vacation, as it is, probably, no longer worth their sacrifices; while others are contemplating moving to countries with stronger currencies, or at least those that are not pegged to the US dollar.

On the news today, from PDI: By Doris Dumlao

The peso continued to strengthen against the dollar Thursday, surging to a new seven-and-a-half-year high of 41.10 to the dollar before closing at 41.24. Currency traders suspected Bangko Sentral ng Pilipinas of buying dollars at the day’s peak rate of 41.10 to the greenback Thursday morning to slow down the peso’s rise.

“The peso might hit 40.80 next week but there might be a healthy correction because the US dollar is hitting oversold levels,” Rizal Commercial Banking Corp. senior vice president Marcelo Ayes said.

He said the correction might reach up to 41.60 but any dollar rebound would simply be an opportunity to sell the greenback.


If you are an OFW, what can you do?

1. Do not add 50 or 100 dollars extra to your monthly remittance.
2. If your family can afford to tighten their belts here, reduce your monthly remittance by 100 or 200.
3. If the corrections happen next week, cash in your dollars ASAP.
4. Negotiate with your employers for an increase, I am certain many of them will consider your request. The Middle East currencies are not really "weak", if they are not dollar peg; and oil is currently nearing 100 dollars a barrel, so they have more profits, more contracts, and will, definitely, entertain your request, than let you go back here. Think about it.


Probably, the Central Bank can no longer afford to buy more dollars as they already lost close to 50 billion pesos last quarter trying to defend the Peso.

For the stock market, it finished at its lowest level in over two weeks on Friday as investors took profits following a mixed session on Wall Street. Lets see what going to happen this week,

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