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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
PHP
Spot USD/PHP had a look above PHP56.000 Thursday for the first time since 2005 as another round figure surrendered to the rallying pair. The peso has been comfortably the worst performer in the Asia EM basket this week and is on track to retain this status come the COB, despite ticking higher today.
- The peso has found some poise this morning, playing catch-up with overnight risk-on flows and a round of hawkish comments from Bangko Sentral ng Pilipinas chief that crossed the wires late doors Thursday.
- BSP Governor Medalla upped the ante ahead of next month's monetary policy meeting, suggesting that members are ready to consider an outsized half-point rate hike. The official told reporters that the BSP is "prepared to be more aggressive in raising its policy rate, compared to its initial gradualist stance."
- Momentum watchers should take note of the fact that the RSI for spot USD/PHP has remained in overbought territory for almost a month now. A bearish divergence is materialising on the daily chart (see Fig. 1 below), as the spot rate printed a higher high Thursday, but its RSI formed a lower low.
- Spot USD/PHP deals -0.138 at PHP55.942 at typing. A retreat under Jun 29 low of PHP54.600 would provide a sign of bullish exhaustion, shifting focus to the 50-DMA at PHP53.351. Conversely, a push through Jul 7 high of PHP56.075 would five bulls a green light for targeting the 2005 peak at PHP56.448.
- USD/PHP 1-month NDF last at PHP56.070, unchanged on the day. A break above PHP56.220, which capped gains on Thursday, would bring a cluster of highs from 2005 located in the PHP56.300-56.550 area into play. Bears look for a fall through Jun 28 low of PHP54.740.
Fig. 1: Spot USD/PHP Bearish Divergence
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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