THE peso weakened slightly against the dollar on Friday as market participants adopted a wait-and-see attitude ahead of remarks from central bank officials of the United States and Europe, which may contain hints on their next policy moves.

The peso ended the week at P51.08 against the dollar, slipping from Thursday’s P51 finish. It opened at P51.05 and was strongest at P51.04 during the session. The low was P51.145.

Two traders interviewed on Friday said trading remained relatively quiet, breaking a three-day streak of a stronger peso as investors stood on the sidelines ahead of an Economic Policy Symposium in Jackson Hole, Wyoming where the heads of the US Federal Reserve and the European Central Bank (ECB) are expected to make policy speeches.

“We saw more of a range trade, it was very quiet. We think markets are sitting on the sidelines because we have Jackson Hole,” one trader said by phone, referring to the expected speeches of Fed chair Janet L. Yellen and ECB president Mario Draghi.

A second trader noted that the market mainly consolidated during Friday trading as markets await hints on the next monetary policy moves of the two major economies, adding that the dollar “bounced a little bit” after weakening the past few days.

He added that the volume of dollars traded “normalized” after two straight days of logging around $1-billion.

BSP Governor Nestor A. Espenilla, Jr. said the peso’s move likely got some support from foreign direct investment inflows this week.

Mr. Espenilla said the currency has depreciated by 2.5% against the dollar year-to-date, but noted that the peso simply reflects volatility in market sentiment largely due to overseas developments.

“We allow the peso to adjust moderately and gradually. I can assure that the BSP in firm control of the exchange rate,” he said during the Economic Journalists Association of the Philippines forum, adding that the peso is not expected to free-fall as the economy “is not in crisis.”

“A moderate weakening of the peso is actually supportive of exporters, of overseas workers, BPOs, (and) tourism. So there are positive things there.”

Mr. Espenilla added that the peso’s movements remain consistent with the government’s investment-led growth strategy, as some observers attribute the weakening of the peso to concerns over the Philippines’ current account deficit – the first in 15 years.

Mr. Espenilla said he remains comfortable with the country’s external position despite a wider trade gap, saying that it simply reflects increased imports that will eventually support the government’s ambitious infrastructure spending plans. – Melissa Luz T. Lopez

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