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USD/PHP Off Recent Highs, BSP Ready To Intervene

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USD/PHP sits slightly higher in the first part of Friday trade, the pair last near 57.85. We are off yesterday's highs which printed near 58.00 (57.96). At this stage PHP is tracking as the weakest Asian FX performer in April to date, down around 2.8%, with IDR the next worst (off 2.2%).

  • This weakness appears to be getting the authorities attention. Headlines cross late yesterday from BSP Governor Remolona that the central bank was prepared to intervene, if necessary, to curb PHP weakness (per BBG).
  • This may heighten expectations that the 58.00 level is somewhat of a short term line in the sand for the authorities.
  • Still, earlier remarks this year from Remolona suggested a more hands off approach around the FX backdrop. Remolona also noted yesterday that PHP weakness is largely reflective of USD gains and Middle East tensions.
  • As we noted recently, PHP losses this week have been a little out of line with broader cross-asset moves. Still, Thursday's real in US real yields, coupled with firmer oil prices won't be aiding sentiment.
  • For USD/PHP, the 20-day EMA is back around 57.03, so some distance from current spot levels. The pair is in overbought territory per the RSI (14).
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USD/PHP sits slightly higher in the first part of Friday trade, the pair last near 57.85. We are off yesterday's highs which printed near 58.00 (57.96). At this stage PHP is tracking as the weakest Asian FX performer in April to date, down around 2.8%, with IDR the next worst (off 2.2%).

  • This weakness appears to be getting the authorities attention. Headlines cross late yesterday from BSP Governor Remolona that the central bank was prepared to intervene, if necessary, to curb PHP weakness (per BBG).
  • This may heighten expectations that the 58.00 level is somewhat of a short term line in the sand for the authorities.
  • Still, earlier remarks this year from Remolona suggested a more hands off approach around the FX backdrop. Remolona also noted yesterday that PHP weakness is largely reflective of USD gains and Middle East tensions.
  • As we noted recently, PHP losses this week have been a little out of line with broader cross-asset moves. Still, Thursday's real in US real yields, coupled with firmer oil prices won't be aiding sentiment.
  • For USD/PHP, the 20-day EMA is back around 57.03, so some distance from current spot levels. The pair is in overbought territory per the RSI (14).