CAD/PHP Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average and lacks a clear driver in the current context.
Key drivers:
• Rate gap: The Bank of Canada maintains its overnight rate at a level seen as supportive for economic activity, while the Bangko Sentral ng Pilipinas is anticipated to ease its monetary policy further amid domestic challenges.
• Risk/commodities: The Canadian dollar is benefiting from higher oil prices, which are currently above average and support its value, given Canada's status as a major oil exporter.
• One macro factor: Deteriorating balance of payments for the Philippine peso indicates ongoing pressure on its currency and economic outlook.
Range: CAD/PHP is likely to drift within its recent range as it holds above the average without strong external influences pushing it toward extremes.
What could change it:
• Upside risk: A significant rebound in oil prices could further strengthen the Canadian dollar.
• Downside risk: Any unexpected additional monetary easing from the BSP may weaken the peso and could affect the CAD/PHP rate negatively.
