US Dollar / Philippine Peso

USD/PHP does not yet have 20 sessions of daily history, so its volatility — and with it the surprise reading — is shown as unavailable rather than estimated.

Over the last 60 sessions of daily returns, most inversely to AMZN (−0.44).

Its last close is at the 100th percentile of its own last 85 sessions, and its 20-day volatility at the 0th, near the bottom of its range for the period.

Market read: The USD/PHP is testing its daily highs, showing relative strength as it breaks away from the pack.

What it is

USD/PHP expresses how many Philippine pesos one US dollar buys; a rising rate signals a weaker peso. The peso floats under an inflation-targeting framework run by the central bank, the Bangko Sentral ng Pilipinas, which intervenes to smooth sharp moves. Onshore trading takes place among local banks during Manila business hours, and offshore investors largely use non-deliverable forwards settled in dollars.

What drives it

The Philippines has an unusual balance of payments. It typically runs a sizeable deficit in goods trade, importing fuel, food and capital equipment, but it receives large and steady inflows from two sources that sustain the peso. The first is remittances from millions of Filipinos working overseas, which are large relative to the size of the economy and tend to rise ahead of the Christmas season, giving the peso a familiar seasonal tailwind late in the year. The second is services exports, led by business process outsourcing such as call centres and back-office work for foreign companies.

Oil is a key pressure point: as a net importer of fuel, the country sees its import bill rise when crude prices climb, which has historically weighed on the peso. The interest-rate gap between the Bangko Sentral and the Federal Reserve shapes portfolio flows into Philippine bonds and shares, and global risk aversion can trigger outflows. Domestic inflation, including food prices such as rice, and political developments are further influences.

How it trades through the day

Activity is concentrated in the Asia block (22:00–07:00 UTC), which covers Manila’s trading day, local data releases and central bank decisions. Onshore liquidity largely disappears once the Philippine session closes, so through the London block (07:00–13:00 UTC) and the New York block (13:00–22:00 UTC) the rate tends to move less and to take its direction from offshore forwards and the broad dollar.

What it tends to move with

USD/PHP has historically risen with Brent crude and the US Dollar Index, and moved in the same direction as regional pairs such as USD/IDR and USD/THB. Its moves are usually smaller than those of higher-beta Asian currencies, reflecting the stabilising effect of remittance flows and the central bank’s smoothing.