USD/PHP Threatens 58.00 Break, Fresh Highs Back To Nov 2022

USD/PHP sits just off session highs the pair last in the 57.85/90 region, still down a little over 0.50% for the session in PHP terms. Not long after the open we got to 57.93, which was fresh highs in the pair back to Nov 2022. Highs from 2022 came in around the 59.00 level.

• Renewed PHP weakness looks a little at odds with cross asset drivers, with broader USD trends a little more stable this week. Local equities have moved off recent lows (although offshore portfolio equity outflows persist, last at -$152mn for April to date), while the uptrend in oil prices has stabilized somewhat.
• Still, a firmer core yield backdrop, coupled with weakness in global equities over the past 24 hours, is likely weighing. BSP Governor Remolona has also stated this year the central bank would have a more hands off approach around FX (compared to previous efforts on intervention).
• Comments from Finance Secretary Recto (who also sits on the BSP board) have also crossed the wires (BBG). He stated that the policy rate will depend on the inflation. Earlier remarks by Recto (from Apr 19) stated if PHP fell to 59.00 versus the USD it would likely limited rate cuts going forward.
• The next CPI print is on May 7, while the BSP meeting is on the 16th.