The week ahead

This is one of those weeks where there is absolutely nothing on the schedule. I don’t have anything to watch on the PSE, and I’m not keeping my eyes on anything in the US or around the world. I’m only partially curious to see what the Bank of Canada (BOC) will decide when it meets to discuss rates on Thursday. They were the first of the major central banks to pivot, but the slowing Canadian economy has led most analysts following the situation to expect the BOC to cut this week (and twice more in 2024). Oh and look at that, Joe Biden just dropped out of the race and endorsed Kamala Harris as the Democratic nominee for President, so I guess I’ll be watching how all of that unfolds.

MB BOTTOM-LINE: The only reason I’m watching Canada is to follow how its currency reacts to the interest rate differential between Canada and the US. Canada’s economy is very closely linked to the US, and the exchange rate between the Canadian Dollar and the US Dollar is of critical importance to companies in Canada. While the exact dynamics are not the same, the US is a major trading partner and the exchange rate between the Philippine Peso and the US Dollar has huge implications for remittances from US-based OFWs (and US Dollar-earning OFWs stationed in other locations). For the average OFW, a strong dollar (or weak peso) enhances the value of the dollars remitted to the Philippines. For the average PSE corporation holding US Dollar-denominated debt, a strong dollar (or weak peso) makes that debt even more burdensome. 

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