Bias: CAD/PHP is bullish-to-range-bound, as CADPHP sits above its 90-day average and in the upper half of the 3-month range.
Key drivers:
• Rate gap: BoC holds a very low policy rate while BSP is expected to ease further, keeping the domestic cost of funds favorable for Canada and supporting CAD versus PHP.
• Oil: Oil prices sit near multi-day highs with volatility; higher oil tends to support CAD as an exporter, while PHP remains sensitive to domestic funding dynamics and external demand for Philippine assets.
• Macro factor: The Philippines’ balance of payments deteriorated in 2025, implying ongoing PHP downside risk and continued pressure on the peso.
Range: Expect CAD/PHP to drift within the recent 3-month range, with occasional tests of the upper end if oil remains firm and global risk appetite holds.
What could change it:
• Upside risk: sustained oil strength or a firm BoC stance that keeps policy broadly unchanged could push CAD higher against PHP.
• Downside risk: a deeper PHP weakness from external pressures or faster BSP easing could weigh on CAD/PHP.
