SGD/PHP Outlook:
Slightly weaker, but likely to move sideways, given its position just above the recent average and recent low trading levels.
Key drivers:
• Rate gap: The Monetary Authority of Singapore is taking a more accommodative approach, while the Bangko Sentral ng Pilipinas may soon cut rates, widening the gap between the two currencies.
• Risk/commodities: Global oil prices have shown stability, benefiting the SGD more due to Singapore's robust economy, while the PHP may struggle as the country's economic challenges weigh on it.
• One macro factor: The Philippine peso is under pressure, hitting record lows due to economic performance concerns and market expectations of a potential interest rate cut by the BSP.
Range:
The SGD/PHP pair is likely to hold within its recent range, as it trades near the 30-day low but above its recent average.
What could change it:
• Upside risk: An unexpected tightening of Singapore's monetary policy could strengthen the SGD.
• Downside risk: A stronger market consensus on a significant rate cut by the BSP may lead to further weakness in the PHP.
