THE PESO weakened against the dollar amid expectations of easing inflation.
The local unit ended at P51.93 against the greenback on Tuesday, weaker by 10 centavos compared to the P51.83-per-dollar close on Monday.
The peso started the session at P51.80 versus the dollar. Its weakest point was at P52.01, while its intraday best was at P51.76 against the greenback.
Dollars traded rose to $1.173 billion from $991.27 million on Monday.
A trader attributed the peso’s decline to the inflation forecast released by the Bangko Sentral ng Pilipinas (BSP) on Monday.
“The peso weakened following the release of softer inflation forecast for September 2019 from the BSP…The local currency might continue to depreciate ahead of softer Eurozone inflation and US manufacturing reports overnight,” the trader said.
This was echoed by UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion: “The US dollar gained strength as investors were largely optimistic, cancelling macroeconomic risks for the moment. Peso is expected to move sideways this week as the market awaits inflation data to be released this Friday.”
The Philippine Statistics Authority is set to release inflation data for September on Oct. 4. The BSP Department of Economic Research said on Monday that headline inflation in September likely settled within the 0.6-1.4% range amid declining rice prices and electricity rates, which will offset the recent uptick in fuel prices and other prices.
This compares to August’s 1.7% and the year-ago print of 6.7% which was a nine-year high that was sustained in October 2018.
For today, the first trader expects the local unit to move around the P51.85-P52.05 band against the dollar, while Mr. Asuncion sees it playing within P51.60-P51.90. — LWTN