Peso Firms As Receding Fed Worry Turns Focus To Philippine GDP Beat

Spot USD/PHP has pulled back after a rejection of key resistance from PHP51.500 and last changes hands -0.070 at PHP51.265. A further sell-off past Jan 12/5 lows of PHP50.955/50.900 would spark hopes for a deeper pullback, while bulls need a clearance of PHP51.500 before taking aim at Mar 18, 2020 high of PHP51.823.

• USD/PHP 1-month NDF last -0.020 at PHP51.400. Bears keep an eye on the 50-DMA at PHP50.871, while initial topside focus falls on Jan 18 high of PHP51.950.
• Peso strength might be linked to yesterday's Q4 GDP data, with annual growth printing comfortably above expectations. Some may be looking back at the data as post-Fed jitters dissipate.
• The Philippine Covid-19 task force raised six more provinces to Alert Level 3, while OCTA Research said that Metro Manila is not yet ready to move down to Level 2.
• Bangko Sentral ng Pilipinas said that "preserving ongoing monetary policy support shall help sustain the economy's momentum over the next few quarters." At the same time, they pledged readiness to respond to any signs of second-round inflation.
• BSP comments were included in the central bank's quarterly inflation report, which will be replaced by a monetary policy report going forward. The first MPR will be published on Feb 18, i.e. a day after the next policy meeting.