Peso hits 6-week high against US dollar

THE PESO rebounded against the greenback on Thursday, to hit a fresh six-week high after market players sold the dollar amid softer US labor reports and ahead of the release of non-farm payrolls data on Friday.

The local unit ended at P50.27 versus the dollar yesterday, gaining 12 centavos from its P50.39-per-dollar close on Wednesday.

Yesterday’s close was a fresh high for the peso in more than a month or since it closed at P50.22 per dollar on June 23.

The local currency traded generally strong after it opened the session at its intraday peak and closing rate of P50.27 per dollar while its worst showing for the day was at P50.43 against the foreign currency. Dollars traded on Thursday went down to $505.5 million from the $576.04 million that exchanged hands on Wednesday.

One trader attributed the peso’s strong close to lower-than-expected US ADP employment data, which caused the dollar to slump against a basket of currencies.

“The peso closed stronger on weaker-than-expected ADP data. Locally, the exchange rate was also momentum driven, particularly the market’s decision to sell the dollar,” the trader said by phone on Thursday.

Latest data from payrolls processor ADP National Employment Report bared US private employers gained 178,000 jobs in July, well below economists’ estimates of as much as 225,000 jobs added.

“Also, markets are awaiting for the results of NFP (non-farm payrolls) on Friday. The ADP also serves as a gauge of the NFP’s outcome, to which global investors are looking at weaker employment data and will result in a lower dollar,” the trader further said.

The report came a day ahead of the US Labor Department’s more detailed non-farm payrolls report, set to be released today, that includes public and private sector employment.

Meanwhile, another trader said the peso moved higher versus the greenback after a sell-off despite strong demand for the dollar from some corporates.

“We generally saw a sell-off, there was selling interest despite power and oil companies’ strong demand for the dollar,” the trader said.

For Friday, one trader expects the peso to move between P50.25 and P50.45 versus the dollar, while the other trader said the exchange rate could settle within P50.20 to P50.35.