SINGAPORE: The peso hit a near six-month high in the offshore non-deliverable forwards market on Thursday after the Philippine central bank raised its inflation forecasts, while most emerging Asian currencies edged up on positive China trade data.
The peso's one-month NDFs gained as much as 0.4 percent to 44.00 to the dollar, their strongest since Dec. 17.
Earlier, the central bank raised its inflation estimates for this year and next, even though the outlook for inflation remains manageable with money supply growth seen decelerating by the middle of the year.
Bangko Sentral ng Pilipinas also increased banks' reserve requirements by 1 percentage point to dent strong liquidity growth, while leaving its overnight borrowing rate, as expected.
"The statement continue to err on the hawkish side, which is not unexpected actually," said Frances Cheung, head of Asian rates strategy at Credit Agricole CIB in Hong Kong.
"We expect the BSP to hike its key policy rate by 25 bps as soon as in their June meeting," Cheung said.
The yield differential could continue to support the peso and spot peso could strengthen to 44.00 by the end of the second quarter, she added.
Spot peso closed local trading up 0.1 percent to 44.19 before the central bank's decision.
That came as most emerging Asian currencies rose as upbeat China trade data pointed to some stabilisation in the world's second-largest economy.
The Chinese yuan turned firmer, providing further support to regional currencies.
Sentiment toward emerging Asian currencies improved in the last two weeks as the Chinese yuan stabilised and as the US Federal Reserve is expected to keep interest rates low for some time, a Reuters poll showed.
The Thai baht, however, fell to its weakest in almost five weeks as local stocks lost ground due to concerns that ousted Prime Minister Yingluck Shinawatra may face charges over a rice subsidy scheme.
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