USD/PHP Outlook:
Bearish, as the rate is below its recent average and near recent lows, influenced by economic signals from both the US and Philippines.
Key drivers:
• Rate gap: The Federal Reserve has kept interest rates steady, while speculation of a rate cut by the Bangko Sentral ng Pilipinas adds pressure on the peso.
• Risk/commodities: Global economic trends and geopolitical tensions are causing investors to reconsider their positions in the dollar, leading to a weaker USD.
• One macro factor: MUFG's forecast suggests the peso may weaken further to around P60 per dollar due to concerns about economic performance and corruption issues.
Range:
Expect limited movement as USD/PHP is stable near recent lows and likely to hold within its established range.
What could change it:
• Upside risk: A strong recovery in US job data could boost USD demand.
• Downside risk: Implementation of a rate cut by the Bangko Sentral ng Pilipinas could lead to further weakening of the peso.