PHP: BSP starts new hiking cycle – Commerzbank

💡 DMK Insight

BSP’s 25bp rate hike to 4.50% is a clear signal that inflation is becoming a priority, and here’s why that matters right now: This move indicates the central bank’s commitment to controlling inflation, which could have ripple effects across the forex market. Traders should be on alert for currency pairs involving the Philippine peso, as tighter monetary policy typically strengthens a currency. If inflation expectations remain anchored, we might see the peso appreciate against major currencies, particularly if other central banks lag in their tightening efforts. Keep an eye on the USD/PHP pair; a break below recent support levels could signal a stronger peso. But here’s the flip side: if the global economic outlook weakens, the BSP might face pressure to reverse course, leading to volatility. Traders should monitor inflation data closely, as any signs of easing could prompt a shift in sentiment. Watch for upcoming economic reports that could influence the BSP’s next moves, especially in the next monthly cycle.