The Philippine Peso almost breached a major support level when it made a new 2023 intraday low of 56.29 against the US Dollar last week. It was the lowest level for the Philippine currency since December 1, 2022. The local currency had been on a 10-day losing streak catalyzed by the widening of the country\u2019s trade deficit, weaker-than-expected OFW remittances and the rebound in the US Dollar. It was recently reported that the latest OFW remittances grew 2.4% YoY in February, albeit it was the lowest remittance figure and slowest growth in nine months. Trade data reported recently showed the biggest drop in export volume since May 2020 as Philippine goods shipped abroad declined by 18.1% YoY.<\/p>\n\n\n\n
Our View: <\/strong>The USDPHP currency pair looks stretched, as evidenced by its RSI reading of 72.88, which may call warrant a consolidation for the time being. We will be watching the movement of the Philippine currency against the US Dollar very closely over the next few weeks as any shallow pullback from here will indicate further depreciation ahead and will have a negative impact on Philippine equities.<\/p>\n\n\n\n After the P56.33 handle, we see P56.96 as the next resistance level of the Philippine Peso while immediate support is placed at P55.71. A depreciating Philippine Peso will certainly not make future monetary policy decisions any easier for the BSP. Staying put may put more pressure on the local currency while lifting rates will eventually stifle growth.<\/p>\n\n\n\n