CAD/PHP Outlook:
Slightly weaker, but likely to move sideways, as the pair is near its 3-month average and lacks a clear driver.
Key drivers:
• Rate gap: The Bank of Canada maintains a cautious policy stance, while the Bangko Sentral ng Pilipinas may consider cutting rates, which negatively impacts the peso.
• Risk/commodities: Oil prices are significantly above their 3-month average; this should benefit the CAD, yet the recent volatility adds uncertainty.
• Macro factor: Concerns over the Philippine peso are growing, with a potential weakening to P60 per dollar due to economic performance issues and corruption scandals.
Range:
Movement is expected to hold within its stable recent range as both currencies face distinct pressures.
What could change it:
• Upside risk: A sudden increase in oil prices could strengthen the CAD, improving its position against the PHP.
• Downside risk: A clear indication of a rate cut by the Bangko Sentral ng Pilipinas could further weaken the peso, impacting the CAD/PHP exchange rate negatively.