The current market bias for the AUD to PHP exchange rate appears bullish.
Key drivers include an anticipated increase in Australian interest rates by the Reserve Bank of Australia (RBA), projected to lift rates to 3.85% early next year, enhancing the AUD's attractiveness. Additionally, the Philippine peso has been under pressure due to a recent record low against the US dollar, driven by local monetary easing and economic concerns. Furthermore, weak growth forecasts for the Philippines suggest a deteriorating economic outlook, influencing the peso negatively.
In the near term, the AUD to PHP exchange rate is likely to trade within a range that reflects its recent performance, which is 2.4% above the three-month average.
Potential upside risks include stronger-than-expected economic data from Australia or a delay in rate cuts from the BSP. Conversely, renewed instability in the Philippines or aggressive monetary easing could further weaken the peso, impacting the exchange rate outlook.