The CAD to PHP exchange rate has a bearish bias in the near term. Key drivers include the interest rate differential, with the Bank of Canada maintaining its policy rate at 2.25%, while the Bangko Sentral ng Pilipinas has implemented recent rate cuts, creating downward pressure on the peso. Secondly, the Canadian dollar is influenced by oil prices, which are currently facing downward pressure as they are 2.5% below their 3-month average, affecting the CAD's strength due to Canada's status as a major oil exporter. Lastly, economic growth concerns for the Philippine economy, driven by a revised GDP growth forecast and public confidence issues, could further weaken the peso.
Expect the exchange rate to trade within a stable range, reflecting recent highs for CAD to PHP near current levels seen above average. Upside risk might arise if Canadian retail sales data shows stronger-than-expected growth, while downside risk may stem from any further weakening of the yuan, which could affect broader sentiment against Asian currencies, including PHP.
