Peso declines on rising cases, inflation bets
THE PESO retreated versus the dollar on Monday due to rising coronavirus infections ahead of the release of August inflation data.
The local unit closed at P49.925 per dollar on Monday, weakening by 8.5 centavos from its P49.84 finish on Friday, based on data from the Bankers Association of the Philippines.
The peso opened Monday’s session at P49.92 per dollar. Its weakest showing was at P50.035, while its intraday best was at P49.82 versus the greenback.
Dollars exchanged dropped to $717.4 million on Monday from $924.2 million on Friday.
The peso declined versus the greenback as coronavirus disease 2019 (COVID-19) cases continued to surge, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.
Active cases rose by 22,415 to 159,633 on Monday, based on data from the Department of Health. This marked the fourth consecutive day that new infections breached 20,000.
Peso-dollar trading was also affected by market expectations of faster inflation in August, a trader said.
A BusinessWorld poll of 16 analysts yielded a median estimate of 4.4% for August headline inflation. If realized, inflation will again surpass the central bank’s 2-4% target following the 4% print in July and will be faster than the 2.4% logged in August 2020.
The Philippine Statistics Authority will release inflation data on Sept. 7.
For today, Mr. Ricafort gave a forecast range of P49.80 to P50 per dollar, while the trader expects the local unit to move within P49.85 to P50.10. — LWTN
