Bias: bullish-to-range-bound, current EURPHP sits above its 90-day average and in the upper half of the 3-month range.
Key drivers:
- Rate gap: The ECB’s neutral stance contrasts with expectations of BSP easing, supporting EUR versus PHP on rate-gap dynamics, as markets stay cautious.
- Risk/commodities: Oil sits near 30-day highs, above its average, keeping import costs and inflation pressure higher for the Philippines and weighing on PHP, with volatility likely to persist.
- Macro: The Philippines’ balance of payments weakness adds external headwinds for the peso, supporting euro strength against PHP, even as external factors remain data-dependent.
Range: The pair is likely to drift within the 3-month range, with a bias toward testing the upper end as global risk conditions wobble.
What could change it:
- Upside risk: clearer signs of improving eurozone data or a broader rise in risk appetite could lift EURPHP, especially if oil prices stabilise.
- Downside risk: a sharper PHP sell-off from external imbalances or a more aggressive BSP easing path could push PHP lower and EURPHP higher.
