EUR/PHP Outlook:
Bearish, with the rate currently below its recent average and near recent lows, largely influenced by euro weakness amid geopolitical tensions.
Key drivers:
• Rate gap: The European Central Bank (ECB) is holding rates steady while the Bangko Sentral ng Pilipinas (BSP) faces speculation of rate cuts, putting pressure on the peso.
• Oil prices: Recent volatility in oil prices, trading well above average, adds complexity for both currencies, impacting inflation and economic outlooks.
• Philippine economic concerns: Reports indicate the peso could weaken further due to government-related economic performance issues and possible corruption impacting stability.
Range:
Expect movements within a stable range, drifting slightly lower towards recent lows, given current pressures.
What could change it:
• Upside risk: A notable recovery in eurozone economic data could strengthen the euro against the peso.
• Downside risk: Continued weakness in the Philippine economic outlook, especially related to government accountability, may lead to further depreciation of the peso.