USD/PHP spot is a touch above end Monday levels, last around 57.87. We lost 0.76% in PHP terms during yesterday's onshore session. The 1 month sits slightly higher last around 57.93.

• Upside focus for both spot and the 1 month NDF is likely to rest with the 58.00 level. We got close to this level on spot basis back on April 25 (highs 57.96), but verbal rhetoric around intervention picked up at this time from the central bank.
• Recent PHP weakness is a little at odds with broader USD trends, see the chart below. Likewise, a fairly resilient local equity market backdrop and steady energy prices, which have been correlated with USD/PHP moves.
• The market may be concerned around this Thursday's BSP meeting, particularly after last week's slight downside CPI miss and softer domestic details within the GDP report.
• The BSP has still stressed upside inflation risks in the near term and may be wary of a dovish shift at Thursday's meeting given recent FX weakness.
• At this stage, none of the surveyed economists by BBG see a shift in rates at Thursday's meeting (26 surveyed). The Reuters survey suggests the same, although the Q4 outlook has an expectation of a 6.0% policy rate (versus 6.50% current). The April survey had a 6.25% consensus for Q3.
• Hence the underlying BSP tone is likely be watched closely on Thursday around future easing risks.

Fig 1: USD/PHP & BBDXY USD Index Trends

Source: MNI - Market News/Bloomberg