PHP Outperforming Post Yesterday's BSP's On Hold Outcome

USD/PHP is holding close to session lows. The pair opened sharply lower hitting 55.675, before move back into a 55.70/75 range, which is where we last tracked. This is around 1% off recent highs from Wednesday close to 56.25. Earlier May lows came in at 55.55 (May 11), while the simple 50-day MA sits further south at 55.21. The 200-day sits near 56.09, with moves above this resistance point proving unsustainable.

• PHP is outperforming softer Asian FX trends elsewhere, particularly USD/CNH, which has risen above 7.0700.
• Yesterday's BSP on-hold decision was expected, but the market may have taken some comfort from the fact that BSP Governor Medalla said the central bank will resume tightening if necessary (based on data), but the most likely outcome is on hold for the next 2-3 meetings. The market may have been fearful of a more dovish BSP outlook.
• The market consensus also sits with no change going forward, although some forecasters see cuts before year end. Much is likely to depend on the Fed, with the BSP Governor reiterating as much.
• The Governor also stated FX intervention is much less now compared to August 2022. USD/PHP was at similar levels during that period and now. At face value this suggests less BoP pressures now compared to that period.