AUD/PHP Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of Australia's current cautious approach to interest rates contrasts with expectations of a rate cut from the Bangko Sentral ng Pilipinas, supporting a stronger AUD.
• Risk/commodities: Rising commodity prices have helped the Australian dollar, but falling iron ore prices are putting pressure on its performance.
• One macro factor: The latest data showing Australia’s factory gate prices rising may strengthen expectations for a potential interest rate hike from the RBA.
Range: The AUD/PHP is likely to hold within its recent range, showing some volatility.
What could change it:
• Upside risk: An unexpected interest rate hike by the RBA could boost the AUD further.
• Downside risk: Continued speculation of a BSP rate cut could lead to a sharper decline in the PHP, impacting the exchange rate dynamics.
