AUD/PHP Outlook:
The AUD/PHP rate is currently trading above its 90-day average, indicating a slightly positive outlook. However, geopolitical tensions and uncertainty may lead to fluctuations within this range.
Key drivers:
• Rate gap: The Reserve Bank of Australia's position influences the AUD compared to the Bangko Sentral ng Pilipinas, which is maintaining cautious monetary policy amid domestic challenges.
• Risk/commodities: Australia's vulnerability to geopolitical risks can negatively impact the AUD as it is a risk-sensitive currency; heightened tensions usually lead to a flight to safe havens.
• One macro factor: Philippine economic growth projections have been revised downward, which could weigh on investor confidence in the peso.
Range:
The AUD/PHP is set to hold within the recent 3-month range, subject to any shifts in global or domestic conditions.
What could change it:
• Upside risk: A significant improvement in global risk appetite could strengthen the AUD.
• Downside risk: Continued geopolitical tensions could further pressure the AUD.