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Peso climbs slightly as dollar slips after mixed US jobs data

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THE PESO strengthened a tad against the dollar on Monday following the release of unemployment data in the United States last Friday.

The local unit ended Monday’s session at P53.40 versus the greenback, two centavos stronger than the P53.42-per-dollar finish on Friday.

The peso strengthened immediately as it opened the session at P53.35 versus the dollar. It rose to a P53.32 high, while its intraday low stood at P53.405 against the greenback.

Dollars traded rose to $620.2 million from the $506.5 million that switched hands in the previous session.

A foreign exchange trader said on Monday that the peso has “traded within the same range over the past few days.”

“There’s not much difference from the previous days. The range was still the same,” the trader said in a phone interview. “Although the dollar was generally weak across the board over the weekend, the dollar-peso didn’t move much.”

The trader added that market players priced in the US non-farm payrolls data released last Friday.

The US economy added 213,000 jobs in June, data released by the Bureau of Labor Statistics last week showed. This was higher versus the 195,000 market expectation in a Reuters poll.

However, unemployment rose to four percent in the same month as more people sought new jobs.

“The unemployment rate was higher. It’s because of the participation rate which effectively, if you look at it, was a stronger number because more people returned to the labor force,” the trader explained.

Meanwhile, another trader said the local unit closed a tad stronger after the US labor report “came weaker” despite the formal imposition of US tariffs on China.

The US started imposing 25% tariffs on $34 billion worth of Chinese goods on Friday, initiating a trade war. In response, China responded by imposing tit-for-tat levies on American goods including cars, soybeans and lobsters.

For Tuesday, the traders expect the peso to move between P53.30 and P53.50 versus the dollar.

“The peso might weaken amid expectations of softer June local exports data to be released [on Tuesday],” the second trader noted.

Most Asian currencies also strengthened on Monday, as the dollar struggled near 3-1/2 week lows after closely watched US wages indicators disappointed the market.

Riskier assets globally, including the regional currencies, took some respite from an escalation of the Sino-US trade dispute after both countries on Friday slapped tit-for-tat tariffs on each others’ goods.

The dollar index against a basket of six major currencies was 0.1% lower at 93.915.

The Taiwanese dollar gained 0.4% against its US peer, hours ahead of exports data which is expected to show solid, albeit slightly moderating growth.

The Indian rupee, the worst performing Asian currency this year, was up 0.3%. Inflationary concerns from higher oil prices and the fiscal cost of a recent hike in minimum support prices, a government program that buys crops from farmers, are expected to cap gains.

Indonesia’s rupiah firmed 0.2% to 14,338. Perry Warjiyo, the country’s central bank governor, flagged US-China trade tensions as a concern to growth. Indonesia has raised its benchmark rate by 100 basis points so far this year to defend a fragile rupiah. The government also recently announced a plan to review capital goods imports to control the current account deficit.

The Chinese yuan, which has been hit hard recently amid the intensifying Sino-US trade row, was 0.4% firmer at 6.623 per dollar as investors looked ahead to a data-heavy week. — Karl Angelo N. Vidal with Reuters