Just when it looked like the dollar would fall below 40 things turned around. Will they stay in this direction? Hard to say but I think they will. The one thing that would destroy this trend is if the US defaults on its debt. Something which I think is way too possible in the current political climate.
There are a multitude of reasons for this turn around. Here are the ones I can think of:
- Quantitative easing in the USA will end next month.
- The Euro is in the midst of a debt crises.
- Gold is at historical highs.
- The dollar is near historical lows.
- Inflation risk in the UK.
- Increased inflation in Asia.
- Fear of decreased growth in Asia
- The US stock market may be headed for a bear market.
For the last 18 months or so those of us living in the Philippines have seen a huge drop in our spending power. Some thought it would never turn around. I blame really poor media coverage and those wishing to sell their newsletters for that.
I thought things would turn around but I thought it would start about a month for now. The debt crises with Greece seems to have jump started this a little early. Thank you Greece. :)
The thing about Forex Philippines, no matter how badly the dollar is doing, other currencies can do even worse. People make the mistake of not considering factors in other nations. And an understanding of basic economics and historical trends will tell most that things will improve.
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