Philippine Peso: Bearish but constrained by Oil – OCBC
OCBC strategists Christopher Wong and Sim Moh Siong note Philippine Peso (PHP) remains under pressure even after a larger-than-expected 50bp Bangko Sentral ng Pilipinas (BSP) hike to 5.50%, reflecting persistent inflation concerns. Higher rates may temper depreciation but are unlikely to fully offset elevated Oil prices, external imbalances and domestic growth worries. OCBC keeps a cautious…
OCBC analysts Christopher Wong and Sim Moh Siong observe the Philippine Peso (PHP) continues to face downward pressure despite the Bangko Sentral ng Pilipinas (BSP) implementing a larger-than-anticipated 50 basis point rate hike to 5.50%. This upward shift in interest rates is aimed at curbing inflation concerns, but the outlook remains uncertain.
Inflation fears are on the rise, with the BSP revising its 2027 inflation forecast upwards to 6% from 5.4%, driven by high oil prices and possible El Niño impacts on food costs. While higher rates could potentially dampen the peso's depreciation, these external factors pose significant challenges. OCBC maintains a cautious outlook, emphasizing that a genuine PHP recovery hinges on lower oil prices and an improved global economic environment.
The daily momentum is only mildly bullish, with the Relative Strength Index (RSI) signaling overbought conditions. Short-term trading opportunities exist near recent highs around 63.65 and 63.85, while support levels are identified at 63, 63.65, and 62.65.
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