It is time we talk about the US dollar to Philippine peso rate of exchange again. It is really probably past time. Though I do talk more about it on our new Philippines forum as  I can post blurbs about it there.

For a while, the dollar to peso rate of exchange remained mostly unchanged. It stayed around 42.7 for quite some time. I don’t think I recall the currency pair just hanging in the same place for such a long time before. I didn’t know why but I did eventually come to understand it.

US Dollar to Philippine Peso Refused to Budge

Forex Trading chartThe markets were waiting for the Fed meeting that took place a week or so ago. During the previous meeting, it indicated that they were considering another round of asset purchasing. Or the words most informed expats have come to dread.  Those words being quantitative easing (QE).

After the meeting and the Fed painting less gloomy outlook toward the US economy that took the fear of more QE off the table for now. Once that happened, the dollar began to climb again. Its not always coming up golden for the dollar of course.  It is a bumpy road but since the end of QE2, the US dollar has shown slow improvement over the Philippines peso.

It has been over 44 in recent months. I do not recall what caused it to slide back down to 43 and below. It clearly is not always up. It is my perception though the dollar has had more ups since July of last year than downs since July of 2011.

China’s Bubble Burst Helps the US Dollar to Philippine Peso

During this month, China’s bubble burst. We don’t yet know if this will signal a trend for China toward slower growth.  I think slower around 7% instead of 12%.  Barack Obama might make a deal with the devil if he could pull that off. He’s made worse deals, after all he has to deal with Republicans every day. (He says with a wicked grin on his face.)

Last month, Chinese officials met with the World Bank to discuss ways to modernize its economy in the years ahead. China acknowledged then that it would see slower growth in the future. I suspect all this was to lay the ground work to keep unrest within the public as low as they possibly could. Seems big brother is alive and well in China too.

Today however the markets have seen the dollar dip back under 43. As I type this the US dollar to Philippine peso is trading at 42.9100 according to XE.com. I believe we will see it back over 43 soon. I hope my optimistic view isn’t caused by wanting it to be so. I don’t think it is but one never knows the power of their own desires.

I don’t think I’ve blogged about it here, but I opened a real dollar account in the forex not long ago.  All of my trades have made profits. Last week though, I didn’t trade at all. I’ve been way too busy. There has been a shake up in the Internet marketing field and that’s kept me overwhelmed with work. I hope to get back to it very soon. The amounts I’m trading in are so small that it will take many years to realize a profit worth talking about in terms of dollars. But if I look at it in terms of rate of return percentage, I’m doing very well.  I’m earning more there than I could with the money sitting in my savings about which really earns me nothing.  After I pay my bank fees, it really just whips that out.

That banks are struggling seems odd to me. They keep looking for ways to raise the fees we pay. Think about their business model. When we loan them money and that is what we are doing when we put our money in their vaults, they charge us fees for making that loan to them.

If we borrow our own money back, plus a lot more usually, they turn around and charge us for that too. How can banks possibly be in trouble? I really could write a great deal about this topic but that’s best said on a site other than one about the Philippines.

It wasn’t long ago that the dollar was below 42.5 and looked like it was headed to near and maybe even blow 40 pesos to 1 US dollar. That didn’t happen, mostly things to America’s best friend to expats. Yes, Greece, who else. Things are better for Greece and the euro. Better than falling off the edge of the earth but it is likely Greece will once again be in trouble. Everyone knows this and more funds are expected to flow into Greece to help it out.

With China appearing to finally about to fall victim to the world recession, there will be less growth in the Philippines. If that turns out to be the case. We don’t know that yet. I’ve noticed that Filipino are very crafty in adapting their policies when they need to as well. I’m not worried about the Philippines. It can take care of itself. I know many foreigners don’t think so but I think so. I’ve watched them do just that over the last four years.

The US economy does seem to be on its way back, the Chinese boom may very well be coming to an end leaving the dollar having the potential to rise again.  Either way, I’ll be okay because now I know how to benefit from a falling dollar or a rising dollar. I just go to the forex and trade.

By Rusty Ferguson

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