EUR/PHP Outlook: Slightly positive, but likely to move sideways, as the rate is just above its recent average and lacks a clear current driver.
Key drivers:
• Rate gap: The European Central Bank is maintaining a neutral monetary policy, while the Bangko Sentral ng Pilipinas is expected to ease rates, making the Euro more attractive relative to the Peso.
• Risk/commodities: Oil prices are elevated, which can support the Euro due to its stronger economic connections while potentially impacting inflation in the Philippines and weakening the Peso.
• One macro factor: The Philippines is facing economic challenges, with a projected decline in infrastructure spending raising concerns about growth and foreign exchange inflows, further pressuring the Peso.
Range: The EUR/PHP pair is likely to test its recent range, showing limited movement as both currencies adjust to prevailing economic conditions.
What could change it:
• Upside risk: Improved economic data from the Eurozone could strengthen the Euro further.
• Downside risk: Any swift actions or announcements from the Bangko Sentral ng Pilipinas could lead to a faster depreciation of the Peso.
