THE PESO may weaken against the dollar this week as likely hawkish hints from the minutes of the latest US Federal Reserve policy meeting may boost the greenback.
The local currency ended last week at P54.13 against the dollar, stronger than the P54.18-per-dollar finish last Thursday.
It also rose week-on-week from its P54.23 finish on Oct. 5.
A foreign exchange trader said the peso’s movement will be dependent on how the dollar will react to global equity markets this week.
“We’re not expecting huge data from the US, so it’s more of how the global equity market will move and how the dollar will react to that,” the trader said by phone.
The recent decline in stocks has yet to spread into foreign exchange markets, with currencies in emerging economies still appreciating and safe-haven currencies such as the yen and franc not budging significantly, according to a Reuters report.
Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines, said the dollar might remain strong this week as market players bet on hawkish hints from the Fed minutes.
“In the first three days of the week, the greenback might just move sideways with an upward bias,” Mr. Dumalagan said in an e-mail on Sunday, as potentially strong US data on building permits and retail may overshadow possibly softer reports on housing starts and industrial production.
“The excepts of the latest US monetary policy meeting are widely expected to affirm views of more US rate hikes ahead, despite lingering concerns on global trade,” Mr. Dumalagan added.
Meanwhile, possibly slower Chinese economic growth could “ignite fears of slowing global growth” which may prompt investors to flock to safer currencies such as the dollar and yen, he said.
This week, the trader expects the peso to move within P54 to P54.20, while Mr. Dumalagan gave a wider P54-P54.20 range. — K.A.N. Vidal

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