AUD/PHP Outlook: Bullish, as the rate is significantly above its recent average and approaching recent highs due to strong Australian economic data.
Key drivers:
• Rate gap: The Reserve Bank of Australia is expected to raise interest rates, while the Bangko Sentral ng Pilipinas may ease rates, widening the gap in yields and benefiting the AUD against the PHP.
• Risk/commodities: Recent high prices for Australian commodities have bolstered the AUD, with traders attracted to its role as a commodity currency.
• One macro factor: The impressive Australian jobs report showing lower unemployment supports the outlook for the AUD, suggesting sustained economic strength.
Range: The AUD/PHP is likely to hold near recent highs, possibly drifting upwards within the established 3-month range.
What could change it:
• Upside risk: Further positive economic indicators from Australia, such as a strong CPI release, could enhance the AUD's position.
• Downside risk: A sharp deterioration in the global economic outlook or renewed weakness in commodity prices could pressure the AUD lower.
