THE PESO is seen to move sideways against the dollar this week ahead of likely mixed economic data in the US as well as key summits abroad.
The local unit ended Friday’s session at P53.51 per dollar, a centavo weaker than its P53.50 finish the previous day.
Friday’s close was also weaker than the P53.42-per-dollar finish on July 6.
Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines (LANDBANK), said the peso-dollar exchange might move sideways.
“The dollar is expected to move sideways this week, with a downward bias, as likely mixed economic and geopolitical signals abroad might prompt investors to lock in the dollar’s recent gains,” Mr. Dumalagan said in an e-mail over the weekend.
He said the peso might trade stronger in the first two days of the week as its US counterpart might depreciate following last Friday’s weaker-than-expected US consumer sentiment and ahead of “likely softer” US retail sales.
According to the University of Michigan’s monthly survey, consumer sentiment dropped to its six-month low of 97.1, lower than the 98.2 market consensus in a Reuters poll, on the back of rising concerns over trade spats between the US and its main trading partners.
“The dollar may also shed some of its recent gains, as critical meetings among world leaders could potentially end well, improving investors’ risk appetite,” Mr. Dumalagan said.
US President Donald J. Trump is scheduled to meet with Russian President Vladimir Putin in Helsinki, Finland today.
Meanwhile, the European Union will meet with Japan in Tokyo to sign a free trade accord. The bloc will also discuss trade and investments with China in a summit in Beijing.
“The three summits this week involving the US, EU, China and Japan are expected to receive mixed interpretations, although they may generally reinforce the message of greater economic cooperation among countries, despite ongoing trade issues,” Mr. Dumalagan added.
However, he noted the dollar’s decline might be tempered by “likely softer” gross domestic product growth of China as well as safe-haven buying due to lingering trade tensions.
Toward the end of the week, LANDBANK’s market economist said, the greenback may bounce back supported by likely hawkish speeches from Federal Reserve officials amid mixed US economic data and possible inflation uptick in the Eurozone.
“[Fed officials Jerome Powell and Randal Quarles] are expected to affirm views of two more US rate hikes this year,” Mr. Dumalagan said.
For this week, Mr. Dumalagan sees the peso moving between P52.95 and P53.65 versus the dollar, while a foreign currency trader gave a P53.30-P53.55 range.
“If the dollar globally will just range, the peso might just track that move,” the trader noted in a phone interview on Friday. — K.A.N. Vidal