USD/PHP Back Below 55.00, Focus On Next Week's BSP Meeting

USD/PHP is back to the 54.88 level, with earlier dips towards 54.80 supported. We closed yesterday at 55.085, so at this stage sit +0.35% firmer in PHP terms for the session. Like elsewhere in the region, the peso has benefited post Powell comments, with the slight easing in real US yields also likely helping at the margins.

• Earlier we had the unemployment rate tick higher to 4.3% for December, from 4.2%, but we are still close to cyclical lows.
• There was likely more interest in BSP Governor Medalla's comments around more work needing to be done around addressing inflation pressures. The Jan CPI surge (8.7% y/y), which beat all expectations, including the BSP's, has renewed focus on the next BSP meeting (Feb 16), with some speculation of a 50bps BSP move.
• The Governor noted more work needs to be done on the non-monetary to contain inflation pressures. He also noted that while Jan should represent the peak for the CPI, a further supply shock can't be ruled out.