Therefore, with the pair about 10% below its all-time high, it makes sense to buy the USD now. As such, while historical performance is not always a predictor of future performance, we can assume that the pair will continue rising in the future. Historically, we have seen that the USD/PHP pair has been in an upward trend. We recommend comparing the money transfer website or app to get the best price. Others provide a favourable exchange rate and a small commission. Some companies provide the service for free and then make money by providing an exchange rate that favours them. Sending USD to PHP is relatively simple and affordable. These foreign firms pay them using some of the top money transfer companies like Wise and MoneyGram. In addition, Filipinos make a substantial number of people working remotely for foreign companies. There are over 4 million Filipinos in the US and the number is possibly higher. In 2022, the country received over $32 billion, mostly from the United States. Most importantly, the Philippines is one of the biggest receivers of remittance funds from the US. At the same time, service trade is also significant. Data shows that the two countries do total goods trade worth over $18 billion. There is a growing need for sending USD to PHP because of the strong ties between the US and the Philippines. Therefore, the pair will likely continue rising in the coming months since the Fed is expected to remain more hawkish than the Philipinnes’s central bank. It moved slightly above the 38.2% retracement level and the key level at 54.43, the highest point in September 2018. The price has been supported by the 200-week moving average and is now a few points above the 50-week moving average. This was the lowest point since June 20 and also along the 50% Fibonacci Retracement level. Turning to the weekly chart, we see that the USD to PHP price crashed to a low of 53.65 in January this year. But in this case, the actions of the Federal Reserve tend to have more weight. Like other currency pairs, the USD to PHP also reacts to central bank decisions. In January 2023, it hiked by 0.50% and gave signs of rates slowing down in 2023. It joined other central banks by hiking rates in 2022 from 2% to a high of 6%. The Central Bank of the Philippines (CBP), like the Federal Reserve, has also embraced a tight monetary policy environment in a bid to fight this inflation. The headline consumer inflation jumped from a low of 0.8% in 2019 and reached its highest of 8.7% in February this year. Like other countries, the Philippines went through a rough patch during the Covid-19 pandemic as its GDP crashed and moved into a high-inflation environment. At the same time, the headline consumer inflation remained steadily above 6% while retail sales jumped. In February, data showed that the unemployment rate dropped to 3.4%, the lowest in 53 years. The enthusiastic outlook about the Fed waned after the US published strong economic numbers. Analysts attribute the drop to the fact that America’s inflation started dropping in July. This ~10% drop happened between October and February 2023. In most cases, the US dollar tends to rise when the Fed is aggressively hawkish.Īfter peaking at 59.2, the USD/PHP pair plunged to a low of 53.6. It moved the official cash rate from between 0% and 0.25% to over 4%. The Federal Reserve also started hiking interest rates aggressively.
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