Forecasts for CAD to PHP
The Canadian dollar (CAD), also known as the "loonie," has recently found support from positive GDP figures indicating an unexpected acceleration in domestic growth. This uptick comes amidst political stability, as the ruling Liberal party retained power without a majority, giving the CAD a boost. Analysts suggest that future movements in the CAD could be closely linked to fluctuations in oil prices, given Canada's status as a significant oil exporter. The current oil price stands at $62.13 per barrel, which is 12.2% lower than its three-month average of $70.79. Such volatility in the oil market, where prices have fluctuated within a 25% range, could significantly affect the CAD's strength.
Currently, the CAD to Philippine peso (PHP) exchange rate is stable at 40.36 and remains within a narrow 3.9% range over the past three months. This suggests that while there may be some short-term fluctuations, the CAD has maintained a relatively stable position against the PHP during this period. However, with the looming possibility of a drop in oil prices, the CAD may face challenges ahead.
On the other hand, the outlook for the Philippine peso is less optimistic. Observers cite concerns regarding the Philippines' external balances and a potentially overvalued peso. Analysts from ABN Amro have warned that these factors may lead to a depreciation of the PHP against the USD in 2025, and this sentiment may extend to CAD/PHP dynamics as well. Global trade tensions, particularly due to tariffs imposed by the US, are also negatively influencing the peso.
Compounding these challenges is the socio-political climate in the Philippines, particularly the recent arrest of former president Rodrigo Duterte, which has sparked uncertainty ahead of the upcoming mid-term elections. While such elections typically do not lead to significant policy shifts, the corruption charges and associated political unrest could weigh on market confidence and overall economic stability.
As a result, while the CAD may benefit from positive sentiment tied to oil prices and economic growth, the PHP faces pressures from domestic and external challenges. The interplay of these factors suggests that traders should remain vigilant, as significant movements could occur based on developments in both oil markets and local geopolitics.
