AUD/PHP Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Reserve Bank of Australia has recently raised interest rates while the Bangko Sentral ng Pilipinas is considering a cut, widening the gap between AUD and PHP interest rates.
• Risk/commodities: Strong demand for Australian commodities is supporting the AUD, especially as China's economy retains momentum, encouraging purchases of materials like iron ore.
• One macro factor: Australia's inflation rate is above the RBA's target, raising expectations for further monetary tightening, which supports the AUD.
Range:
The AUD/PHP rate is likely to hold within its recent 3-month range, fluctuating between established levels without significant directional movement.
What could change it:
• Upside risk: A stronger-than-expected performance in China's economy could boost demand for Australian exports.
• Downside risk: Heightened speculation around a rate cut by the BSP could weaken the PHP further against the AUD.
