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Deepening BoP Deficit Weighs On Peso

PHP

Spot USD/PHP has extended gains to fresh cycle highs this morning, with the rate last trading +0.208 at PHP54.473, off session highs printed earlier at PHP54.615. Resistance from Oct 4, 2018 high of PHP54.435 gave way in the process, shifting topside technical focus to the next round figure above (PHP55.000). Meanwhile, there is no firm support until the round figure of PHP53.000, which capped gains for a few days earlier this month.

  • USD/PHP 1-month NDF last +0.200 at PHP54.620. Topside focus falls on Oct 4, 2018 high of PHP54.800, which has managed to withstand buying pressure. Bears look for a dip through Jun 15 low of PHP53.330.
  • The Philippines reported a balance of payments deficit of $1.606bn for the month of May vs. April's $415mn deficit. The central bank said it reflected foreign debt payment by the national government.
  • The BSP will announce its monetary policy decision on Thursday, with consensus looking for a 25bp hike to the policy rate. Click here to see our preview.
  • In local news, OCTA Research said COVID-19 cases in Metro Manila may peak by early July and asked residence to be careful. It seems unlikely that the Alert Level will be raised, as the hospitalisation rate stays low.

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