This is, I guess, a very good question. I am asking this so that I will know whether to keep my moolah in Pesoses, or in US dollars. Back in 2005, I turned most of my US dollars to Pesos when it was at 55 something. Indeed, a good gain when the Peso moved to around 40 the past months.There are signs now that the US government, and various Central banks all over the world, are doing something to prop up the US dollars. Yesterday, the Peso moved to its highest for the past few weeks - now to 41.30.
My guiding questions are:
1. Do you believe that the Peso can move to 35 to the dollar? I don't think so. Not this year or in the near future.
2. Do you believe the Peso is overvalued and can possibly moved to 45 in a few months or next year? I believe so.
So, I am moving my Pesoses now to US dollar, actually preferably, to Yuan or Dinar (Qatari), or Saudi Riyal.
-------------
On the news today from PDI:
Economic growth will fall sharply this year due to an overvalued peso and businesses who fail to re-invest their profits, a Manila-based think-tank said Wednesday.
After gross domestic product (GDP) struck a 31-year high with growth of 7.3 percent in 2007 and inflation at a 20-year low of 2.8 percent, the Philippine Institute of Development Studies said growth would fall.
It forecast GDP growth this year should drop to 5.9 percent with inflation rising up to 5.2 percent.
Institute president, Josef Yap, said the Philippines was suffering from "Dutch Disease," as characterized by a shrinking manufacturing sector and a sharply appreciating peso.
"That's a sign of trouble ahead," he said.
Photo courtesy of www.keithlango.com