CAD/PHP Outlook:
Bearish as the CAD is below its recent average and near recent lows, pressured by soft oil prices and trade tensions.
Key drivers:
- Rate gap: The Bank of Canada has maintained its cautious rate policy while the Bangko Sentral ng Pilipinas may consider a rate cut, weakening the PHP.
- Risk/commodities: Oil prices are currently below average, which typically weakens the CAD since Canada is a major oil exporter.
- One macro factor: Recent reports indicate that the PHP could weaken further amid economic concerns and the potential for lower interest rates.
Range:
The CAD/PHP is likely to drift within its recent range, showing limited upward momentum.
What could change it:
- Upside risk: A significant rebound in oil prices could boost the CAD.
- Downside risk: Heightened concerns about the Philippine economy or a confirmed rate cut by the BSP could further weaken the PHP.