PHP
USD/PHP sits in the 58.50/55 region in recent dealings, little changed for the session. This is lagging a modestly softer USD trend seen in terms of other USD/Asia pairs.
- For USD/PHP we are sub the 20-day EMA, (around 58.61), but the 50-day EMA is further south at 58.18. recent highs rest around 58.93.
- Earlier headlines cross from BSP Governor Remolona, which stated an August rate cut was possible and that the central bank can cut ahead of the Fed (per BBG). This follows Friday's slight downside surprise in terms of the June CPI print.
- Sell-side analysts expect cuts from the BSP in H2, with increased risks they are bought forward after Friday's data.
- This has the potential to weigh on PHP all else equal, although softer USD data momentum has risen US easing odds for H2 in recent weeks. This is likely curbing USD gains to a degree.
- More broadly for USD/PHP, the pair is generally in sync with the other high yielder trend in the region in terms of IDR, since the start of this year (the yellow line on the chart). The chart below plots South East Asia currencies since the start of the year (rebased to 100), USD/PHP is the white line.
- On the data calendar this Wednesday we have May trade figures.
Fig 1: South East Asia FX USD/Asia Pairs (Start Of 2024 = 100)
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