PHP: A Near-Term Depreciatory Bias

While the Philippine peso has held up relatively well in the face of widespread Asia FX weakness, we are maintaining a near-term depreciatory bias. Technically speaking, we expect to see a retracement back towards trendline support, currently at PHP47.85/US$. Prolonged risk aversion, US dollar strength and growing expectations of Chinese monetary tightening could see this level breached over the coming weeks, setting up a further bout of depreciation.

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