Peso weakens versus greenback on US non-farm payrolls report
THE PESO ended weaker on Monday due to concerns over weaker-than-expected US non-farm payrolls data released last week.
The local unit closed at P51.86 against the greenback on Monday, weaker by 13 centavos from its P51.73-to-a-dollar finish last Friday.
The peso opened the session at P51.75 versus the dollar, which was also its best showing for the day. Meanwhile, its intraday low was ay P51.93 against the greenback.
Dollars yesterday dropped to $828.6 million from the $1.12 billion seen on Friday.
“The peso weakened after the US non-farm payrolls report last Friday came out weaker than market expectations, which mounted concerns about the future health of the US labor market,” a peso trader said via e-mail.
The US unemployment rate dropped to near a 50-year low of 3.5% in September, with job growth increasing moderately, suggesting the slowing economy could avoid a recession for now despite trade tensions that are hammering manufacturing.
Non-farm payrolls increased by 136,000 jobs last month, the US government’s survey of establishments showed. The economy created 45,000 more jobs in July and August than previously estimated. Economists polled by Reuters had forecast payrolls would increase by 145,000 jobs in September.
September’s job gains were below the monthly average of 161,000 this year, but still above the roughly 100,000 needed each month to keep up with growth in the working-age population. The smaller household survey from which the unemployment rate is derived showed a jump of 391,000 in employment in September.
Fed Chair Jerome Powell reiterated on Friday that the economy was “in a good place,” adding that “our job is to keep it there as long as possible.”
Michael L. Ricafort, economist at Rizal Commercial Banking Corp. (RCBC), said the local unit ended weaker as China showed “reluctance” for a trade deal with the United States.
“The peso closed weaker today after China signalled reluctance on a broad trade deal pushed by the US, to be discussed in the upcoming US-China trade talks on October 10-11, 2019; reluctance by China to commit major issues such as any reforms on China’s industrial policy and government guarantees,” Mr. Ricafort said in a text message on Monday.
“US dollar was also slightly higher vs. major global/Asian currencies after strong US unemployment rate as of September at 3.5%,” Mr. Ricafort added.
For today, the trader sees the local unit moving within the P51.75-51.95 range against the dollar.
“The local currency might weaken further ahead of likely upbeat US producer inflation reports for September 2019,” the trader said. — BML with Reuters
