Dollar to Philippine Peso Currency Trading After The June Fed Meeting

The dollar to Philippine peso didn’t seem to even much notice that the US Federal Reserve board had its June meeting this week.

However it left currency traders analyzing every word that was spoken and making projections here and there.

finance graphBefore the Fed meeting, the dollar to Philippine peso rate was at 43.798 to 1.  The dollar is flirting with a 44 peso!  While the dollar benefited in most of the world because of the Feds disclosures along with the on again, off again problems in Greece, the dollar fell against the Philippine peso.

Overall the dollar seems to be tending up now. It may have hit its bottom with the peso about six weeks ago but I’m not going to speculate because I’ve learned something through writing about the exchange rate.

In the short term, fundamentals underlying a currencies value matter very little. Market sentiment is more important. What investors think will happen and that is a self fulfilling prophecy.

Something else I’ve learned, financial reports from Bloomberg and the like, they don’t matter much to your average expat. If the value of the peso goes up .06% overnight, I could care less.  Yet the financial papers want to sensationalize it. They love to talk about new highs and new lows. Unless you’re trading currency and doing it in large amounts, these small fluctuations just don’t matter to most of us.

Dollar to Philippine Peso Currency Trading for 2011

I took a look back at where the peso has been over the last year.  Here are some numbers.

Jan. 1st 43.6399993896

Feb 1st 44.1899986267

March 1st 43.4799995422

April 1st 43.3099959616

May 1st 42.7900009155

June 1st 43.0599998878

June 24 43.4700012207

So, how is the dollar really doing against the peso this year?  Not bad.  It is holding its own, virtually unchanged. At its lowest point in those numbers a guy with a pension of $2000 a month saw a reduction of about $35 a month.  The same guy has lost about $100 a month though since the dollar to Philippines peso rate was at P48.  That won’t kill you either but $100 is significant money for a guy earning only $2000 a month.

Still, I have far more opportunities in the Philippines than I would living in the USA. The conditions that lead to the low cost of living in the Philippines will change over time but they are not here yet. They are still a long way off.

Philippine Peso to Dollar — The Rest of 2011

A friend of mine predicted in January of 2011 that he didn’t think the dollar’s rate would improve much in 2011 and I think he’s right. We are half way through the year and so far, the real change is almost nothing.

Probably the most important part of the Fed meeting was that the chairman indicated that there would not be another round of money creations that has been called quantitative easing.

I have been reading that many investors thought there would be. I don’t know why. It doesn’t seem to have helped. We don’t really know that though, the US economy might even be in worse shape than it is now. Perhaps it helped more than it appears. Just because things didn’t get better doesn’t mean they wouldn’t have become worse if there was no action at all.

For now, the Fed is taking a hands off approach to let what they think is an under performing economy rise up to where it should be. I still think the US economy will start to do better in 2012.

For now, we can thank Greece for helping prop up the dollar; also a more bearish outlook on stocks is sending people into safer and more liquid investments. A strong US stock market usually means a lower value for the dollar. There are inflationary pressures in most of Asia and that includes the Philippines. This too has put the brakes on the slide of the dollar to Philippine peso.

The idea the dollar will never improve denies fundamental economics. That invisible hand provides balance and the opposing forces on a currency will push it up and push it down but logic tells me there are better days ahead for the dollar to Philippine peso currency trade rate.

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