Peso drops on US data

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THE PESO slipped on Monday as the dollar strengthened on the back of upbeat US economic data released on Friday.

The local currency ended yesterday’s session at P51.51 against the greenback, dropping six centavos from its P51.45-per-dollar finish on Friday.

The peso opened the session weaker at P51.62 versus the dollar. It plunged to as low as P51.67, while its best showing for the day stood at P51.42 against the greenback.

Dollars traded decreased to $981.1 million from the $1.12 billion recorded in the previous session.

A trader said in an e-mail on Monday said that the market was reeling from upbeat US economic data, which boosted the foreign currency.

“The peso [depreciated yesterday] following the release of stronger-than-expected US non-farm payrolls data and steady US unemployment rate last Friday,” the trader said.

The US Labor Department said on Friday that the country produced additional 200,000 jobs last month after rising 160,000 in December. Meanwhile, the average hourly earnings grew to $26.74 by 0.3% in January, boosting the year-on-year increase in the hourly earnings to 2.9%.

Ruben Carlo O. Asuncion, chief economist of UnionBank of the Philippines, said there seems to be a general preference for the euro and yen over the greenback “because of the recent strengths” of the eurozone and the Japan.

Another trader added that the profit-taking seen intraday tempered the weakness of the peso.

For today, the first trader said the peso might move between P51.20 and P51.60, while the second trader gave a slimmer range of P51.40 to P51.70.

“The peso is expected to rebound ahead of likely upbeat Philippine inflation data for January to be released [today],” the first trader said.

Nearly all of the 14 analysts asked in a BusinessWorld poll late last week said January inflation will likely pick up from December’s 3.3% reading and the 2.7% rate seen in January last year. The poll yielded a 3.5% median headline inflation estimate. — KANV

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