AUD/PHP Outlook:
The Australian dollar (AUD) is likely to increase as it is currently trading above its recent average and near recent highs. This is supported by robust domestic employment data and favorable commodity prices.
Key drivers:
• Rate gap: The Reserve Bank of Australia is expected to maintain a tighter monetary policy compared to the Philippine central bank, boosting the AUD's attractiveness.
• Risk/commodities: Recent strength in global commodity prices, particularly demand from China, underpins the AUD’s gains, making Australian exports more valuable.
• Macro factor: Improved consumer confidence in Australia suggests a healthier domestic economy, which could lead to further AUD support.
Range:
The AUD/PHP is likely to test the upper extremes of its recent 3-month range while staying relatively volatile.
What could change it:
• Upside risk: A significant rise in commodity prices could further bolster the AUD.
• Downside risk: Any political or fiscal instability in the Philippines might negatively impact the peso and enhance AUD gains.