USD/PHP Continues To Test PHP50.50, BSP Leaves Interest Rates On Hold

Spot USD/PHP continues to test the psychological PHP50.500 barrier, which has emerged as a key layer of resistance. The rate last trades unch. at PHP50.400, with bulls looking for a move through PHP50.500, before taking aim at May 18, 2020 high of PHP50.906. Conversely, a dip through Aug 4 low of PHP49.605 would turn focus to the 50-DMA at PHP49.377.

• USD/PHP 1-month NDF sits +0.050 at PHP50.660. A jump above Aug 6 high of PHP50.870 would please bulls, while bears keep an eye on Aug 11 low of PHP50.210.
• Bangko Sentral ng Pilipinas left interest rates unchanged on Thursday, in line with expectations, but raised its 2021 CPI forecast to +4.1% Y/Y from +4.0% previously. Bangko Sentral's target range is +2.0%-4.0%. The Monetary Board said they "remain keen on sustaining monetary policy support for as long as necessary in order for the momentum of economic recovery to gain more traction as well as to help boost domestic demand and market confidence, especially as risk aversion continues to temper credit activity".
• The central bank also warned against the adverse impact of current lockdowns on economic recovery. Meanwhile, Pres Duterte approved lowering the level of restrictions in Laguna, Iloilo City and Cagayan de Oro by one notch to MECQ from ECQ.
• The Philippine data docket is empty today, but overseas remittances should hit the wires over the coming days.