My forecast for the Peso before Christmas day, that is by December 24, is that, it will, at the least, reach 41.5 to the dollar. Strongest for the past 10 years.
Yesterday, the peso surged to 42.12 to the dollar on strong year end cash remittances from overseas Filipinos and foreign currency inflows into the stock market. It is trading at its strongest level since it touched 42.07 on June 6, 2000. The peso has appreciated by over 16 percent since ending 2006 at 49.03 to the dollar, and is by far Asia’s best-performing currency this year.
The influx of money is not year over. More remittances will come a week before and after Christmas; and the Peso, barring any incident similar to the recent Manila Peninsula event, would certainly reach 41 something to the dollar. It has nowhere to go...
This situation becomes more certain if we consider (1) the continued jittery over the subprime property downturn in the United States, (2) the American Express Bank, in its latest weekly outlook, said recession-like conditions would probably force the Fed to cut interest rates again soon.
Furthermore, Deutsche Bank chief economist Michael Spencer said “lower interest rates in the US, unless matched by cuts in Asia, will tend to add to the pressure on Asian currencies to appreciate as the interest rate differential moves in a direction that would tend to attract fixed income investments in Asia.”
So, unless the Philippines Central Bank do something to the interest rates, there is no where to go for the Peso but reach 41 something before December 24.
So? if you are a local forex player, what will you do? hmmm.
Source: PDI
Yesterday, the peso surged to 42.12 to the dollar on strong year end cash remittances from overseas Filipinos and foreign currency inflows into the stock market. It is trading at its strongest level since it touched 42.07 on June 6, 2000. The peso has appreciated by over 16 percent since ending 2006 at 49.03 to the dollar, and is by far Asia’s best-performing currency this year.
The influx of money is not year over. More remittances will come a week before and after Christmas; and the Peso, barring any incident similar to the recent Manila Peninsula event, would certainly reach 41 something to the dollar. It has nowhere to go...
This situation becomes more certain if we consider (1) the continued jittery over the subprime property downturn in the United States, (2) the American Express Bank, in its latest weekly outlook, said recession-like conditions would probably force the Fed to cut interest rates again soon.
Furthermore, Deutsche Bank chief economist Michael Spencer said “lower interest rates in the US, unless matched by cuts in Asia, will tend to add to the pressure on Asian currencies to appreciate as the interest rate differential moves in a direction that would tend to attract fixed income investments in Asia.”
So, unless the Philippines Central Bank do something to the interest rates, there is no where to go for the Peso but reach 41 something before December 24.
So? if you are a local forex player, what will you do? hmmm.
Source: PDI