USD/PHP Within Recent Ranges Ahead Of BSP Decision

USD/PHP is firmer for the session so far, last in the 56.65/70 region. This is 0.30% weaker in PHP terms versus yesterday's closing level, but the pair remains within recent ranges. Recent highs are around the 57.00 level, while early August highs in the 56.45/50 region may provide some USD support if we see a concerted pull back.

• Coming up later is the BSP decision (see our preview here). No change is expected, with focus on BSP rhetoric, particularly around the policy bias. Fallout for PHP could materialize if the central bank sounds too dovish, although that seems unlikely given recent commentary from the Governor.
• Otherwise, USD/PHP is likely to remain dictated by broader USD trends. The currency is the third worst performer in EM Asia month to date (behind THB and KRW). Firmer commodity prices have also weighed on the terms of trade backdrop, which remains a focus given the country's trade deficit position.
• Local equities are struggling for positive traction, like elsewhere in the region, the index last under 6400 (PCOMP), while offshore investors have largely been on the sidelines from a flow standpoint.