SGD/PHP Outlook: Slightly positive but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Monetary Authority of Singapore is holding a stable policy stance, while the Bangko Sentral ng Pilipinas considers a potential interest rate cut, widening the yield differential favoring the SGD.
• Risk/commodities: Oil prices have been steady, maintaining stability in regional currencies, which could help support the SGD against the PHP.
• One macro factor: The BSP's indication that they will not defend a specific exchange rate level suggests further pressure on the peso.
Range: SGD/PHP is likely to hold within its recent range as external conditions evolve.
What could change it:
• Upside risk: Stronger-than-expected economic data from Singapore could bolster the SGD.
• Downside risk: Continued weakness in the peso due to BSP decisions may lead to further depreciation against the SGD.
