Wow, the US dollar to Philippines peso exchange rate has seen dramatic improvement for American expats living in the Philippines. At this time, it is flirting last years high of 44 to 1USD. Will it continue before it starts a downward fall? It may reach 44 or higher but I don’t think we will see more of the strong improvement that we have seen over the last two months.  The dollar went over 44 for a time on Friday but then fell back to under 44 by days end. I don’t know if the dollar can stay over 44 for an extended time at this point. It doesn’t appear so.

On Friday, the Federal Reserve Bank in the USA signaled that it is eyeing bringing the latest round of quantitative easing to an end. However it doesn’t plan to do that until sometime next year. I think there is a good chance they could end it before that. It all depends on the job numbers and inflation in the USA. Oil prices will also weigh in heavily on that but higher oil prices often stimulates inflation or makes it worse.

An Improving US Dollar to Philippine Peso Exchange Rate for Americans

Some Filipinos have been crying the sky is falling just as Americans do when the dollar is falling. So many see a pride or bragging rights factor in the value of their currency and believe a higher currency value is better than a lower one.  A high currency value has many negatives especially for an exporting country.

The peso is still strong. The fundamentals of its economy are mostly good. The dollar has been in a slump and it is coming US Dollar to Philippine Peso out of it. Until quantitative easing comes to an end in the USA I don’t think we are going to see the dollar over 45.

The US dollar to Philippine peso exchange rate is now at 43.5.  It is hard to say what will happen day to day. Business cycles are a fundamental aspect of finance. The USA was in a deep trough and on the edge of a depression. If you understand just how bad things got in the USA for a while you understand just how fast the recovery has been. It doesn’t seem fast though if you’re the one out of a job.

Within a couple of years, the US economy will be booming. The politicians will be bickering over who gets the credit when really it is those old invisible hands that are mostly responsible. Governments can though give those hands a nudge. When they start pushing, those hands have a tendency to push back.

I suspect right now the central bank of the Philippines is taking action to slow the rise of the dollar when not long ago they were struggling to keep it above 40 to 1 US dollar.  It is part of any central banks purpose to bring stability to markets. I would be surprised if they have not been acting on that.

We will see the dollar continue to rise over time but for the next year and half I don’t think we are going to see more major changes. I do think we’ll see slight upward movement in the value of the US dollar to Philippine peso.

For Americans living in the Philippines, I think we can expect to see better times. I know many of us have been struggling over the last several months.  Our struggles are not completely over but things are starting to look much better.

As always, please share your thoughts about the US dollar to Philippine peso rate of exchange in the comments.

By Rusty Ferguson

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