It has been over three months since I’ve written about the exchange rates between the Dollar and the Peso, and there have been significant movements since that article. Because of this, it’s time that we take another look at the topic, I think. In these days of financial crisis, it can be hard to figure out what will happen with exchange rates. Sometimes the movements in the exchange rate are the opposite of what would seem logical.
I took a screenshot from a website that I use to check the currency rates on Tuesday, when the exchange rate was P47.77 for $1.00. That is an intra-day rate, and I am not sure what the closing will be for the Peso today, as I type this. But, it is clear that the Peso continues falling rapidly against the Dollar. The last article that I wrote was a little over 3 months ago, and at that time the exchange was P44.5:$1. Basically, the exchange has gone against the Peso by about P1 per month since then. At that time I wrote about HSBC bank predicting that the exchange would be at P52:$1 by mid-2009. At that time I said that I thought we’d be looking at more like P48:$1 by mid next year, but it looks like we are already nearly at the rate that I had predicted, and that is only in 3 months! I believe it is now possible that we could breach the P50:$1 mark by year end.
I find it quite surprising that the dollar is strengthening so much during a time when the United States is in severe financial crisis, logically it would seem that it should be the other way around. You would think that a time of great uncertainty in the US Financial Markets would tend to cause a flight away from the Dollar, but the practice has actually gone the other way around, with even the Euro and the Pound losing strength against the Dollar.
With the extreme financial swings that are happening in these troubling times, I am not going to make any predictions on the exchange rates this time around. It certainly seems, though, that the trend is toward a weaker Peso. It’s good news for expats living here, and also for many Filipino families, since so many of them rely on money sent into the country by OFW’s (Overseas Filipino Workers).