Historical exchange rates.

Agree, but the funny thing is that despite the weakening of the Euro against the US $ the exchange rate against the Peso has been rising steadily - much to my contentment... Day before yesterday it actually hit the 58 Peso (buying Euro's, of course), but that has not been seen for years...

Vicmico

 

Personally I think a bit of the issue at play of why dollar has been gaining strength in part among other things is the current push for the Immigration Reform in the US. The Dem's have been pushing and selling this as a huge economy booster and playing the numbers as such for the time being trying to create a false faith in US Stocks and the US Economy to try and bolster support.

However if the bill passes or fails it will go down again to what it was before this new rise around the 40p/$1 level. If it fails it will drop almost immediately with Dems saying the economy is now doomed with the bills failure losing faith. If it passes it will slowly over maybe a month go back down and quite possibly lower as reality comes to light that the bill will simply increase US debt and worsen the Economy severely.

 

Not my intention, just saying probably won't last long and the reason why.

 

The Peso has been dropping against the dollar because Ben Bernanke has suggested that quantitive easing will come to an end soon.

What happens when big economies like Japan, Europe and the U.S. flood markets with cheap money? A lot of money ends up flooding emerging markets (such as the Philippines) as well. A drop in the bucket for the U.S. can be an ocean for the Philippines. Why not? There is a lot of opportunity in emerging markets. Those huge inflows put a lot of upward pressure on the currencies such as the peso.

This is why I hate listening to "the West is in decline, the East is rising" arguments. Where do these people think all the money is coming from?

Now that the spigots are being turned off, the there will be less money to go around. Less dollars means the USD goes up while the PHP goes down.

Is this good for the Philippines?

Given that remittances are such a huge portion of the Philippines' economy, a falling peso is good for the locals. However, you could argue that it's not a good long term trend. A generation of kids is growing up in the Philippines with the idea that money grows on Western Union trees. Why work for $5 / day when you can get a lot more than that from abroad without doing anything? How will you develop the sense of hustling for your daily bread when you know there is always a safety net? How many hot chicks have left Dumaguete (which we can no longer talk to) because they went abroad to work?

I'm loving these exchange rates though! It's a pleasant surprise every time I go to the ATM.