BSP Rhetoric Continues To Do The Rounds Ahead Of MonPol Decision

Spot USD/PHP trades in very close proximity to PHP50.500, a key resistance of area unsuccessfully tested in July. The rate last sits -0.028 at PHP50.378, which bulls looking for a clean breach of that level, before targeting May 18, 2020 high of PHP50.906. Bears look for a fall through Aug 4 low of PHP49.605.

• USD/PHP 1-month NDF last -0.070 at PHP50.520, with bears looking for a sell-off past Aug 3 low of PHP49.680. Bulls keep an eye on Aug 6 high of PHP50.870.
• Bangko Sentral ng Pilipinas said in a written response to questions that its holdings of government bonds swelled almost fourfold during the pandemic. The central bank plans to "carefully unwind some of the government security purchases as part of its exit strategy from extraordinary monetary accommodation" once the economic recovery becomes sustainable.
• This comes after BSP said Tuesday that they will "prioritize the use of monetary policy space to provide support to economic activity amid the pandemic". Bangko Sentral will announce their monetary policy decision tomorrow, with virtually all analysts expecting no interest rate action.
• Metro Manila Council issued a resolution banning outdoor exercise in the region, while it remains under a strict lockdown set to terminate on Aug 20. The document cited a steady increase in new Covid-19 cases in the National Capital Region over the past week.