The Australian dollar (AUD) has shown resilience recently, primarily buoyed by positive trade figures. In the short run, the AUD strengthened initially but struggled to maintain those gains due to a decline in commodity prices, an important factor for this commodity-driven currency. Analysts suggest that without significant Australian economic data on the immediate horizon, the AUD is likely to respond mainly to broader market risk sentiment.
Meanwhile, significant domestic developments indicate potential upward pressure on the AUD. Household spending increased by 1.3% in October 2025, marking the most substantial monthly rise in almost two years. This surge, alongside a robust GDP growth of 2.1% for Q3 2025, has led to speculation regarding a more hawkish stance from the Reserve Bank of Australia (RBA), particularly with inflation concerns rising to 3.8% year-on-year. Markets are beginning to factor in the likelihood of interest rate hikes from the RBA, which typically supports currency appreciation.
On the other side, the Philippine peso (PHP) has experienced downward pressure recently, hitting a record low of 59.262 per US dollar. This drop can be attributed to fears of economic slowdown linked to infrastructure spending controversies, as well as a potential shift towards looser monetary policy by the Bangko Sentral ng Pilipinas (BSP). Subdued inflation levels in the Philippines offer room for potential interest rate cuts, which may further weigh on the peso.
Currently, the AUD to PHP exchange rate is trading at 90-day highs near 39.18, which is 2.6% above its 3-month average of 38.17. The currency pair has remained stable within a 5.5% range from 37.14 to 39.18 recently. Given the contrasting economic narratives, many analysts foresee continued strength for the AUD against the PHP, as the former benefits from an improving economic outlook while the latter grapples with internal issues that may deter investor confidence.
