Peso Extends Losses, Despite Brighter Covid Outlook

Spot USD/PHP extended gains this morning, showing at its best level since July 2020. The rate last sits +0.063 at PHP49.178. A clearance of Jul 23, 2020 high of PHP49.467 would allow bulls to take aim at the PHP49.600 area, which briefly capped gains in mid-Jul 2020. Bears would be pleased by a retreat under Jun 29 low of PHP48.460.

• USD/PHP 1-month NDF last -0.050 at PHP49.370. Bears keep an eye on the 100-DMA/Jun 28 low at PHP48.461/48.430. Bulls initially target Jul 13 high of PHP49.780.
• Sharp losses in the peso have made it into the regional underdog this week. BBG noted that the currency may face some further headwinds this quarter, owing to an expected seasonal boost to imports.
• The Philippines marginally relaxed capacity restrictions in the NCR+ region. Elsewhere, the Dept of Health said that the Philippines is now a low-risk country for Covid-19, as the two-week rate of increase in new cases has been faltering.
• BSP Gov Diokno praised the Philippines' "bright" medium- to long-term prospects, pointing to reforms in the capital markets, loose monetary conditions and the rollout of Covid-19 vaccines.
• Philippine Customs Bureau declared a revenue of PHP52.4bn in June, which was 11.2% above the agency's target.
• The Philippines raised the alert level to 3 (with 5 being the maximum) on Taal Volcano and recommended the evacuation of surrounding villages.
• With nothing much left on the local docket today, focus turns to Philippine CPI and trade balance, which will be released next Tuesday and Friday respectively.