Peso inches up on dovish Fed hopes
THE PESO inched up against the dollar on Wednesday amid expectations of a pause by the US Federal Reserve at its September meeting after a soft US jobs report.
The local currency closed at P56.725 versus the dollar on Wednesday, rising by 2.50 centavos from Tuesday’s P56.75 finish, data from the Bankers Association of the Philippines’ website showed.
The local unit opened Wednesday’s session slightly stronger at P56.68 per dollar. Its intraday best was at P56.60, while its weakest showing was at P56.79 against the greenback.
Dollars traded went down to $1.23 billion on Wednesday from $1.28 billion on Tuesday.
“The peso strengthened as the weaker US job openings and consumer confidence reports tempered market views of a more hawkish US policy stance,” a trader said in an e-mail.
US job openings dropped to a near two-and-a-half-year low last month amid a slowing labor market, which fanned bets that the Fed would keep borrowing costs steady in September.
The Job Openings and Labor Turnover Survey released on Tuesday showed job openings dropped by 338,000 to 8.827 million on the last day of July, the lowest since March 2021.
Meanwhile, a survey from the Conference Board showed consumers’ perceptions of the labor market cooled in August.
The US central bank hiked borrowing costs by 25 basis points (bps) last month, bringing the fed funds rate to a range between 5.25% and 5.5%.
It has raised rates by a cumulative 525 bps since it began its tightening cycle in March last year.
The Fed will hold its next policy meeting on Sept. 19-20.
The peso was also supported by a weaker dollar following the release of weak US data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Thursday, the trader said the peso could appreciate further ahead of likely softer US private payrolls data.
The trader sees the peso moving between P56.55 and P56.80 per dollar on Thursday, while Mr. Ricafort sees it ranging from P56.60 to P56.80. — AMCS
