USD/PHP Closes Above 50-DMA Amid Uncertainty Surrounding BSP Rate Decision

USD/PHP 1-month NDF have advanced after hours, tracking gains in the BBDXY index, with the market preparing for tomorrow's monetary policy decision from the Bangko Sentral ng Pilipinas due in the Asia/Europe crossover at 07:00GMT.

• Spot USD/PHP finished the session at PHP55.185, closing above its 50-DMA for the first time since mid-November and lodging a new one-month high. Gains are considered corrective for now, after the formation of a "death cross" earlier this month, albeit a break above Dec 28 high of PHP56.283 could reignite bullish momentum.
• The Philippine peso struggled to find consolation in expectation-beating overseas remittances data for December released overnight. Cash remittances rose 5.8% Y/Y in the final month of 2022, exceeding the +3.8% consensus forecast, with the full-year figure hitting an all-time high of $36.14bn.
• The Bloomberg consensus is virtually evenly split between a 25bp and 50bp rate hike at tomorrow's BSP meeting, leaning towards the larger increment by a majority of one forecast. Our Asia-Pac team notes that their bias rests with a 50bp hike, although it is clearly a close call (see the full preview here).
• When this is being typed, 1-month NDF trade +0.37 at PHP55.32, rising above its 50-DMA, which capped gains last week. Bulls look to force their way through Jan 4/Dec 28 highs of PHP56.23/56.29.