The market bias for the AUD to PHP exchange rate is range-bound. Key drivers include:
- The Reserve Bank of Australia (RBA) is expected to raise interest rates, which could strengthen the AUD compared to the PHP, especially as the Bangko Sentral ng Pilipinas (BSP) recently cut rates, signaling easing monetary policy.
- Economic growth prospects for Australia appear favorable, contrasting with downward revisions for the Philippines due to political issues affecting confidence.
- The Australian dollar is currently above its three-month average, suggesting some strength likely tied to commodity prices and risk sentiment.
The expected near-term trading range suggests stability, likely within a limited band, as both currencies face opposing pressure from their respective monetary policies.
An upside risk could come from stronger-than-expected growth in Australia, while a downside risk might arise if inflation in the Philippines stays low, supporting a weaker peso.