Peso Forecast

[OnMyWay]

On 2/3/2023 at 2:16 PM, OnMyWay said:

Anecdotally, I think the peak of the dollar / peso rate, at 59, coincided with the U.S. starting to raise interest rates.

I was wrong here.  They are not directly correlated.  First interest rate hike was March 17 2022 and the dollar / peso rate peaked mid-September 2022.

[hk blues]

13 hours ago, OnMyWay said:

I was wrong here.  They are not directly correlated.  First interest rate hike was March 17 2022 and the dollar / peso rate peaked mid-September 2022.

To be fair to you, the accepted wisdom is that when interest rates go up, the currency follows suit all things being equal.  

I highlighted the last part because they never are! 

 

[Possum]

The Fed was effectively giving free gambling money to the big banks some of which went into crypto 'investing.". That inflation would ensue was not surprising.

[hk blues]

9 minutes ago, Greglm said:

The Fed was effectively giving free gambling money to the big banks some of which went into crypto 'investing.". That inflation would ensue was not surprising.

Certainly if the Gold Standard had been maintained such printing of money and resultant inflation would have been avoided.  

[OnMyWay]

4 hours ago, hk blues said:

To be fair to you, the accepted wisdom is that when interest rates go up, the currency follows suit all things being equal.  

I highlighted the last part because they never are! 

 

Yes, probably so.  As I said, what I said was a hunch. 

Just for fun, here are some charts I was looking at.

First is 5 year dollar / peso.  The downward trend reversed in May 2021 and the fast runup started from mid 47s and then peaked at 59ish in October 22.  12 points in only 18 months.  Meanwhile, the interest rate hikes started March 22 and were going strong at 75 basis point when the trend reversed in Oct. 22.

The second is 5 year dollar index.  Same trends as the peso, so that tells me the dollar / peso exchange is about the dollar, not the peso.

Lastly, the third is long term dollar index up to 2015, with events on it.  Given what is expected to happen in the U.S. in 2023 (housing crash, recession) I would say the dollar will continue to go down for a while.  It is 103 now and it went under 80 during the last financial / housing crisis.

Soooo, gentlemen, place your bets!  I think I will hold on to my pesos a bit longer before changing back to dollars.

[hk blues]

29 minutes ago, OnMyWay said:

Just for fun,...

[OnMyWay]

1 hour ago, hk blues said:

You are much younger than I thought! 

[BrettGC]

Pommy mate of mine in Hong Kong is a professional currency/gold trader.  I asked him to take a look at the USD/PHP situation after reading this thread so he added it to his weekly report on Youtube on Sunday.   

The PHP/USD is at 10:08:

https://www.youtube.com/watch?v=6CYGGLO-89s

Edited February 14, 2023 by BrettGC

[JJReyes]

I tried watching and listening to the YouTube BrettGC posted.  Either his Australian dialect was difficult to understand, or the recording was very poor.  Poor visual presentation.  Finally gave up watching.

[BrettGC]

1 hour ago, JJReyes said:

I tried watching and listening to the YouTube BrettGC posted.  Either his Australian dialect was difficult to understand, or the recording was very poor.  Poor visual presentation.  Finally gave up watching.

Pommy is English in Aussie vernacular JJ.  Yes, his North/Midlands accent can be a little difficult if you're not used to it but he's better than many from the same area of England.