DOWNLOAD
USD/PHP 2023 outlook: Don’t bet on a sustainably stronger peso
For those watching the movement of the dollar-peso exchange rate, the recent strengthening of the peso, while desirable for some, may be fleeting.
By Patty Membrebe
Read this content. Log in or sign up.
If you are an investor with us, log in first to your Metrobank Wealth Manager account.
If you are not yet a client, we can help you by clicking the SIGN UP button.
In the past week, the peso strengthened 1.12% versus the US dollar. Year-to-date, however, the local currency has weakened by as much as 13.6%.
The current dip in the dollar-peso exchange rate comes on the heels of a downward momentum in the broad US dollar index, as markets become more optimistic about the US Fed slowing the pace of rate hikes and a possible China reopening next year.
After trading at 20-year highs this year, the US dollar has come off its peak. Now, the question is: Will the US dollar continue to weaken in the coming months?
We cite three main reasons why we think the answer is no.
1. Negative real rates and a still narrow interest rate differential (IRD).
Our base case for the US economy in 2023 is a “bumpy” soft landing, characterized by modestly positive GDP growth (
Read More Articles About: