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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
PHP
USD/PHP sank to a low near 54.27 in the first part of trade, which is levels not seen since early Feb. We sit slightly higher now, last around 54.35/40. Still, this is +0.55% firmer in PHP terms versus closing levels from yesterday. The pair is sub all key EMAs, while the simple 50-day MA comes in at 54.80. Outside of a brief dip below 54.00 in early Feb, the pair hasn't spent too much time at current levels in 2023.
- Onshore equites are recovering, but the PHP has been outperforming local equities for a little while now, see the chart below (note USD/PHP is inverted on the chart).
- This has helped slow net equity outflows (back to flat for the week, but still -$550.9mn for the month).
- The paring back of global rate hike expectations in recent weeks has boosted the carry appeal of the currency and probably helped offset some the negative impacts of global banking worries, particularly for a current account deficit economy like the Philippines.
- The main event risk this week sits with Thursday's BSP decision, where the consensus expects a 25bps rise. This is in line with recent official comments, although there has been some talk of a pause from the BSP this week (Finance Chief Diokno stated either a 25bps or on hold decision).
Fig 1: USD/PHP (inverted) Versus Local Equities
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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