USD/PHP Ignores Higher USD Index Levels, September CPI Eyed Tomorrow

USD/PHP tracks near 56.70 in recent dealings, down slightly (-0.15%), versus yesterday's closing levels. The pair has largely ignored the recent push higher in USD indices, although the move away in oil prices from recent highs has helped the terms of trade backdrop, albeit marginally.

• USD/PHP remains very much within recent ranges, of roughly 56.50/57.00 in recent months.
• Tomorrow the focus rests on the September CPI print. The consensus looks for a 5.3% y/y outcome, the same as August. The m/m is expected at 0.4% (prior 1.1%). The BSP stated last week that its forecast range was 5.3-6.1% y/y for the September CPI. Prior to this data we do get August banking lending data today.
• The IMF downgraded the Philippines growth outlook for 2023 (see this BBG link for more details). The central bank has already been mindful of lower growth risks, although the government is painting a more upbeat outlook.
• In the cross asset space, local equities are modestly down from recent highs (PCOMP last under 6290), but this isn't impacting FX sentiment. Like elsewhere in the region, we continue to see offshore selling of local shares (-$22.6mn month to date).