The dollar often falls in relation to the Philippine Peso during the month of December. I think we have a chance to see the dollar rise in December 2010.
I can’t say for sure. Currencies go up and down quickly. They react very quickly to news, good or bad. Right now though, the Euro is in crisis. That is causing investors to dump their Euros and they often buy dollars when they do.
On November 4th of 2010 the dollar started rising against the peso. It coincided with improved job numbers in the USA reported in late October. By November 11th, the dollar has risen by $1.50 per P1.00 to P43.83. Since that time the dollar has enjoyed a slower rise.
It is too early to know if the worst is over. Poor job numbers could send the dollar back down. Many things could change the situation so one cannot know. The US economy should start to see improvement.
Reports are that malls were packed on the Friday after Thanksgiving. If that translates into sales, the US economy could come out of its long spiral downwards.
There is a bit of conspiracy theorist in me. The USA just had elections. Did the Obama Administration massage the job numbers just before the election? Or on the other hand, one that loves conspiracy theory could find “facts” to show that the Republicans pushed the value of the dollar down before the election in order to bring about change that Obama didn’t ask for.
Most seasoned expats living in the Philippines will tell you the dollar always goes down in December. That it is caused by Filipino that work overseas (OFW) sending money to the Philippines. OFWs often earn in dollars, those dollars are converted in larger numbers and sent back home to the Philippines. That makes sense but I’m not sure the facts bear that out.
Many Filipino earn other forms of currency. When the US economy went into recession two years ago wise Filipino were in a position to lessen the blow. Soon more money from the middle east was flowing into the Philippines. While 10 percent of the Philippine economy depends on overseas workers it is not all from the USA. Yes, we Americans tend to think we are the center of the universe. One of the first things you learn about living in another land is that we Americans are wrong!
I looked back over the prior five years of exchange rate data. In four of those years, the dollar did fall to the peso substantially from the first of November to the end of December. In one of those years though, this was not the case. The dollar did increase in value at year end.
Again this year, November saw an increase in the value of the dollar to the peso. So, I remain highly skeptical that one can count on the dollar falling in December. If that were true, savvy investors would have picked up on that. Then again, for all I know, they have. I doubt it though. Currency trading is just not that simplistic.
If it were true, one could and should sell all their dollars on November 1, converting them to peso and then in January buy the dollar when it is low and wait for November of next year to do it all over again.
I’ve only been following currencies for a few years. Obviously it impacted my life much more one I was living in the Philippines. I’ve taken quite a cut in my pay due to the fall of the dollar over the last two years.
I tend to believe the value of currency is rooted in the economics of the country. I think the facts bare that out. The dollar has fallen because the US government has thrown money into the economy in hopes that would lead to more spending. If one thinks back to how bleak things were in October of 2008, I believe one would have to say that the US economy is more healthy now.
I think by the middle of 2011 the US economy will be on its way to being strong. The dollar will rise and all the American expats living in the Philippines and other places in the world will be happy. Just when everyone is feeling comfortable it will all turn around again.
It is all very normal fluctuations. That’s why the huge investors have their cash in many currencies. While that practice levels out ones losses it also levels out ones gains. For most of us though, we just have to ride the wave. We suffer a little when things turn down and we have a little extra cash when the dollar rises in value.
As for December 2010, I’m hopeful that we will at the very least see the dollar hold steady. I’m hopeful that we will even see an increase in the value of the dollar. I’m slightly optimistic that the dollar will rise but I will not be surprised either way. My emotional reaction to the value of the dollar is the only thing I can be certain will change.
What are your thoughts? Tell me what you think and why you think the dollar will go up or down in December in relation to the Philippine Peso.
The dollar to Philippine peso rate cannot be expected to fall during December.
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