USD/PHP Continues To Track Lower, Local Equities testing YTD Highs

USD/PHP sits slightly lower for the session, last near 56.25. Earlier lows were just under 56.20, levels last seen in early April of this year. PHP is the only Asia FX currency up in spot terms today, although this largely reflects catch up as yesterday onshore markets were closed. The 1 month is around 0.20% weaker in PHP terms, last near 56.26.

• The technical backdrop for USD/PHP remains skewed to the downside. The cautionary point is that the pair is oversold based off RSI (14), which has been the case for a number of weeks now. PHP has been a laggard within South East Asia FX, as we noted last week, so come catch up may be aiding local FX sentiment.
• Key EMAs rest back above 57.00. Early April lows were near 56.125, beyond that lies the 56.00 figure level.
• The local data calendar remains light with the July budget balance figures tomorrow, followed by bank lending data on Friday.
• Weekend protests from supporters for former President Duterte is an onshore focus point, but doesn't appear to be disrupting broader sentiment. Local equities are testing close to YTD highs in latest dealings.
• The other watch point for USD/PHP may be oil prices, which have bounced from recent lows amid Middle East tension/supply concerns in Libya. The correlation between USD/PHP and oil, which has typically been inverse in the past 12 months has not been as strong of late though.