Peso Rally To Run To PHP45.00/US$?

A break beyond resistance in the PHP46.60/US$ area has set up scope for further near-term peso gains, as investor risk appetite continues to make a tentative return and an improving inflation outlook (see Easing Inflation To Allow For Further Rate Cuts, January 7 2009) presents Bangko Sentral ng Pilipinas (BSP) with increasing room to slash interest rates to boost growth. From a technical viewpoint, a move back towards neckline resistance around the PHP45.00/US$ mark currently looks on the cards, providing the new-found optimism towards the Philippines continues to hold.

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