Halister News

(Bloomberg) -- USD/PHP may breach the year-to-date high in the short-term as investors dumping local equities outweigh an expected decision by the Philippine central bank to hold rates, Bloomberg strategist David Finnerty writes.

• Peso is the worst-performing Asian currency versus USD this month, with overseas investors been net sellers of equities every day this month
  • S&P said Sept. 21 that it sees “rising uncertainties surrounding the stability, predictability, and accountability” of President Duterte’s govt.
• FX pair formed a bullish breakout gap on Sept. 9, which was followed by a continuation gap on Sept. 13
  • Breach of resistance at 48.005, year-to-date high, may see FX pair eye test of 49.010, Sept. 2, 2009 high in short-term
  • MACD remains bullishly above zero and signal line
• Bangko Sentral ng Pilipinas will probably leave its overnight borrowing rate unchanged at 3.000%, according to all 16 economists in Bloomberg survey; decision due 4:00pm local time
  • Rate to be on hold though inflation is falling below the central bank’s target corridor of 2%-4% for 2016-18; CPI rose 1.8% y/y in Aug.
  • BSP said last month that it expects CPI to settle slightly below the target range this year, before rising toward the mid-point in 2017 and 2018, signaling that it doesn’t need to cut rates to spur CPI

• NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.