Peso Gains After BSP's Diokno Flags Potential For June Rate Hike

The Philippine peso has caught a bid after BSP Governor Diokno told BBG that the central bank may consider raising the benchmark policy rate in June. This was more specific than his earlier comments, pointing to a potential rate hike in the second half of the year. The official said that policymakers don't see any evidence of second round inflationary effects and added that "we can afford to wait as to what will be the move of the Fed in the next two meetings". Bangko Sentral is "not concerned about the depreciation" of the peso, which is in line with broader regional trend.

• Spot USD/PHP last deals -0.140 at PHP52.275, with bears looking for a retreat under the 50-DMA at PHP51.892. On the topside, the key layer of resistance is located at PHP52.500.
• USD/PHP 1-month NDF last seen -0.140 at PHP52.400. The 50-DMA at PHP52.090 provides initial support, while topside focus falls on Apr 20 high of PHP52.750.
• Philippine budget balance is expected to hit the wires later today.