THE PESO continued to slump against the greenback amid strong appetite for the dollar on the back of positive sentiment from upbeat key US labor data released last week.
The local unit closed at P50.44 on Tuesday, down eight-and-a-half centavos from Monday’s close of P50.355 versus the foreign currency.
The currency opened at P50.42 per dollar. It touched P50.32 against the greenback as its best showing, but sank to as low as P50.46.
Dollars traded went up to $457.9 million yesterday from the $428.9 million that changed hands in the previous session.
Traders attributed the peso’s decline to upbeat market sentiment due to strong US non-farm payrolls (NFP) data.
“The peso continued to depreciate today still because of last week’s strong US labor reports,” one trader said by e-mail on Tuesday.
Similarly another trader said: “The peso’s decline was due to the US NFP figure, which caused markets to be bullish on the dollar.”
US employers hired more workers than expected in July and raised their wages, signs of labor market tightness that likely clears the way for the Federal Reserve to announce a plan to start shrinking its massive bond portfolio.
The US Labor Department said on Friday that non-farm payrolls increased by 209,000 jobs last month amid broad-based gains. June’s employment gain was revised up to 231,000 from the previously reported 222,000.
Average hourly earnings increased nine cents, or 0.3%, in July after rising 0.2% in June. That was the biggest rise in five months. On a year-on-year basis, wages increased 2.5% for the fourth straight month.
Meanwhile, one trader said, “There seems to be demand for the dollar, I’m just not sure where it’s coming from.”
For today, one trader said the peso may range between P50.30-P50.50 versus the greenback while the other said the exchange rate could settle within P50.35 to P50.55.
“There might be sideways movement due to scarcity of fresh leads,” one trader said.
Asian currencies were upbeat on Tuesday after a strong foreign reserves report from China set an optimistic tone as investors readied for this week’s flood of data from China and the United States.
The greenback steadied against a basket of six currencies and held firm above levels it sank to last week.
Sentiment was also bolstered by Fitch’s upward revision of its world gross domestic product growth estimate to 3% in July. — J.M.D. Soliman with Reuters
