Peso Outperforms Recent USD Recovery, Lower Oil/Positive Dec Seasonals Helping

USD/PHP is not too far off recent lows, last at 55.325. Lows on Monday were at 55.24, levels last seen in early August. We are seeing some modest PPH outperformance despite higher BBDXY levels, but the divergence is only modest at this stage.

• Peso bulls will target a move towards 55.00, while on the topside, recent highs have been between 55.55/60. Note the 20-day EMA is around 55.64.
• PHP may be getting some support for positive seasonality. In 4 out the last 6 Dec, PHP has risen against the USD in Dec. This may reflect remittance related inflows.
• The other positive is the move lower in energy prices, which should aid the terms of trade/trade balance outlook, all else equal.
• On the data front we have Oct unemployment tomorrow, along with FX reserves.
• Next Thursday the BSP decision is due, with a steady policy hand likely post yesterday's downside CPI surprise. Still, BSP noted that policy is likely to stay restrictive for some time.