News for the Dollar to Philippine Peso Remains Gloomy

The news for the dollar to Philippine peso rate is not looking very good for expats living in the Philippines. The only positive for expats to hang any hope on regarding the USD vs the Philippine peso is that Asian currencies are not doing well either. Inflation continues to be a concern in the Philippines and the Greece debt problem is hurting all Asian currencies. The reason for that is a weaker Euro will hurt Asian exports. Exports are a factor for the peso but less of one than it is for China and South Korea.

The US economy is doing poorly and thus weakening the dollar. On the other hand, stock market investors are becoming more bearish which will slow the dollar’s demise.

Yesterday the US Federal Reserve Chairman made remarks that lead investors to deepen their bearish outlook toward the US economy. The same remarks indicated that a rise in interest rates would not be expected for sometime. I have to agree that raising the interest rate would further harm the recovery in the USA. It would help strengthen the dollar. At least the chairman did not indicate that the creation of money would continue. The Fed has no plans for additional stimulus for the next quarter.

The dollar to Philippine peso rate has remained just above the 43 rate over the last week. I did see it slip to P42.9 for a bit. It went as high as P43.5 a week or so ago causing me to hope we’d actually see P44 before much longer. That was after a rapid rise in the value of the dollar to the Philippine peso. That rate didn’t last long and the dollar began to slip the next day.

Now, I can only hope the dollar will not fall more in relation to the Philippine peso but I fear that it will resume its slow downward trend before it finally gets better near.  Something not likely until the end of the year or early 2012. I’m only guessing but I think that is the best we can hope for. I can’t, with a clear conscious, hope that the Philippines economy will falter enough to help strengthen the dollar to Philippine peso rate of exchange.

Things can change fast in the FOREX though.  I’m glad I’m not an investor, I think I’d be afraid to go to sleep! For me and most other expats living in the Philippines, the dollar to Philippine peso value is only significant to our standard of living.

The Greece issue has cooled from the boiling point as International Monetary Fund officials agreed to transfer funds to Greece in order to prevent that country from defaulting. As a result, the Euro has made a comeback. A stronger Euro means less demand for dollars and this too will harm the peso to dollars exchange rate. If this comeback is sustained, the peso to dollar rate will not be helpful to American expats living in the Philippines.

The USA recently saw the slowest amount of job growth in eight months, manufacturing growth didn’t meet expectations and consumer confidence is still falling short of what most forecasters had predicted. When jobless claims are up, consumer confidence will be low.  It doesn’t take an economist with a doctoral degree to figure that one out! When consumers lack confidence they don’t buy things they want.  They only buy things they must.

The only positive I have been able to find so far is that there is no indication that Ben Bernanke will take any more actions that weaken the value of the dollar. He can always print more money but lowering interest rates isn’t really an option when they are already near zero.  It wouldn’t surprise me if it isn’t below zero via some new financial calculation that makes it appear the interest rate is 0.25 but is really, “We’ll pay you a little to take some more cash!”

I don’t know though, elections are coming up, Obama needs to turn the numbers around if he wants to stay in office. I’m not arguing that is an accurate way to choose, I’m just saying it is the way people do it. One group of politicians will be willing to trash the economy for political purposes.

Americans Shouldn’t Hold Out Much Hope For Improvement in the Dollar to Philippine Peso Value

American’s living overseas are going to be the least of their concerns. Frankly, I don’t see that we should be a priority.  Restoring the economy is more important than my spending power in Asia.

This morning the dollar to Philippine peso exchange rate stands at P43.23 to 1 USD. Maybe we need to find the right spot to give the dollar a collective push. That is about as likely as the dollar actually rising significantly in the near future.

I think, the only reason the dollar to Philippine peso rate is as good as it is is due to the continued inflation fears in the Philippines. Inflation came in at 4.5 percent in May and most are expecting the central bank of the Philippines to once again increase interest rates.

My excitement of three weeks ago regarding the future of the dollar to Philippine peso has evaporated like a drop of water on a sandy desert floor.

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