USD/PHP Trending Back Towards Late June Highs, CPI Out This Friday

Spot USD/PHP sits near 58.80/85 in latest dealings, down a little over 0.3% in PHP terms for the session so far. We aren't too far away from recent highs (58.93) see towards the end of June. The 20-day EMA is close by (58.63), while the 50-day sits further south (close to 58.12).

• Upside focus is likely to rest around the 59.00 level, which marked 2022 highs. Whilst BSP Governor Remolona stated they don't intervene in FX markets every day, a sharp move through 59.00 may prompt a response from the authorities.
• Like elsewhere in the region, the PHP is seeing headwinds from broader USD gains, amid a firmer yield backdrop. The recent rebound in USD/PHP has coincided with a rise in US real yields (the 10yr back to 2.16%).
• Locally, the main focus will rest on Friday's June CPI print. The market expects a 3.9% y/y outcome (unchanged from May). We will get another CPI update for July on August 6, which comes ahead of the next BSP meeting and where we could see easier policy settings delivered.
• Local equities have fallen since the start of the month, but since comfortably above late June lows, sub 6200 for the PCOMP.