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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
PHP
USD/PHP is pressing higher in latest dealings, tracking at 56.05. We are 0.25% above closing levels from yesterday, while the 1 month NDF is at similar levels and around 0.35% weaker versus end NY levels from Tuesday. Levels wise for spot, we are above all key EMAs, the 100-day is the closest back near 55.93. Late Feb highs in the pair came in just above 56.30.
- Recent lows in USD/PHP rested around 55.30. We are now 1.35% above these lows, so a decent PHP correction. Still, PHP remains one of the better performers in EM Asia FX YTD, down only 1.20%.
- Part of the turn higher in USD/PHP has likely reflected the renewed pick up in oil prices. The chart below overlays spot USD/PHP against Brent crude prices.
- The deterioration in the terms of trade backdrop, particularly given the still persistent trade deficit, is likely helping unwind some of the recent outperformance.
- Earlier comments from BSP Governor Remolona noted that the central bank is watching rice prices (a meaningful source of inflation in recent months). The Governor stated there is room to cut banks' RRR further.
- Comments from President Marco yesterday stated that it is too early for the central bank to be cutting rates given the inflation backdrop.
Fig 1: USD/PHP Versus Brent Crude Prices
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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