USD/PHP Back To The 56.00 Handle, Weakest Asian FX Performer This Week

USD/PHP sits at 56.00 currently, just off session highs of 56.015. This is highs for the pair going back to mid Apr, whilst a -0.45% loss in PHP terms versus yesterday's closing levels. Note we aren't too far away from the 200-day MA (56.105), a resistance point we breached back in Apr. We did see official rhetoric around FX pick up on this move. Apr highs were just shy of 56.40. Yesterday's low was at 55.55 in terms of potential downside support.

• PHP, at this stage, is the worst performer in EM Asia FX over the past week, down 1.25% (MYR is next worst at -0.90%). Some chatter of easier policy settings may be weighing at the margin. HSBC stated the BSP may cut banks' reserves ratios by 200bps in July (see this link).
• Next week's BSP meeting is expected to deliver on hold rates, at least according to the Bloomberg consensus. The meeting is next Thursday.
• In the cross asset space, local equities remain weaker, down 0.60% at this stage, but we remain within recent ranges more broadly. Offshore investors sold -$16.8mn of local equities yesterday.
• This, along with broader USD/Asia gains is likely weighing at the margin on PHP sentiment.