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PHP: USD/PHP Backs Away From 59.00 Break, BSP Has Been Active

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EM BulletPhilippinesBulletAPACEmerging Market News

USD/PHP has backed away from a 59.00 test, the pair last back near 58.90, up around 0.20% in PHP terms for the session so far. We are still comfortably above the 20-day EMA support point, which is around the 58.54 level. The RSI (14) is around 60 so elevated but sub overbought conditions. 

  • BSP Governor Remolona appeared on the wires earlier (BBG), stating that the authorities have been more active in FX markets recently. It's unlikely 59.00 resistance would have held without such activity. Remolona stated this is largely a USD move, although given broader trends it may not be the last test of 59.00 as we progress through to 2025. BoP/trade balance trends have not been favorably for PHP in recent months.
  • Still, FX reserves remain ample in terms of FX defence (last just off cycle highs at $108.5bn)
  • Remolona added that the BSP was open to cutting rates in early 2025,. This comes after yesterday's 25bps cut. One concern for the central bank is the weaker PHP translates into stronger inflation pressures. However, there appears to be a watch point, rather than something that will derail further easing at this stage. 
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USD/PHP has backed away from a 59.00 test, the pair last back near 58.90, up around 0.20% in PHP terms for the session so far. We are still comfortably above the 20-day EMA support point, which is around the 58.54 level. The RSI (14) is around 60 so elevated but sub overbought conditions. 

  • BSP Governor Remolona appeared on the wires earlier (BBG), stating that the authorities have been more active in FX markets recently. It's unlikely 59.00 resistance would have held without such activity. Remolona stated this is largely a USD move, although given broader trends it may not be the last test of 59.00 as we progress through to 2025. BoP/trade balance trends have not been favorably for PHP in recent months.
  • Still, FX reserves remain ample in terms of FX defence (last just off cycle highs at $108.5bn)
  • Remolona added that the BSP was open to cutting rates in early 2025,. This comes after yesterday's 25bps cut. One concern for the central bank is the weaker PHP translates into stronger inflation pressures. However, there appears to be a watch point, rather than something that will derail further easing at this stage.