AUD/PHP Outlook: The outlook for AUD/PHP is likely to increase as the rate sits above its recent average and near recent highs, supported by strong employment data and expectations of interest rate hikes in Australia.
Key drivers:
• Rate gap: The Reserve Bank of Australia (RBA) is positioning for potential interest rate hikes amidst strong labor market indicators, while the Bangko Sentral ng Pilipinas (BSP) anticipates easing measures due to sluggish growth.
• Risk/commodities: Oil prices remain relatively high, which generally supports the Australian dollar as a commodity currency, increasing its attractiveness compared to the peso.
• One macro factor: The RBA's discussions regarding inflation risks signal a tight monetary policy approach, which may further elevate the AUD against the PHP.
Range: AUD/PHP is likely to test the higher end of its recent range, maintaining momentum above 40.66.
What could change it:
• Upside risk: A surprise increase in Australian economic indicators could strengthen the AUD further.
• Downside risk: Any abrupt shifts in U.S. monetary policy could impact global risk appetite and weigh on the AUD.