Peso strengthens on soft US data
THE PESO appreciated against the dollar on Thursday due to soft US labor data that supported views that the US Federal Reserve could pause its tightening cycle at its meeting this month.
The local currency closed at P56.595 versus the dollar on Thursday, strengthening by 13 centavos from Wednesday’s P56.725 finish, data from the Bankers Association of the Philippines’ website showed.
The local unit opened Thursday’s session at P56.70 per dollar. Its intraday best was at P56.57, while its weakest showing was at P56.74 against the greenback.
Dollars traded rose to $1.48 billion on Thursday from $1.23 billion on Wednesday.
The peso was supported by a weaker dollar due to softer labor data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The ADP National Employment report showed private payrolls rose by 177,000 jobs in August from the revised 371,000 in July, Reuters reported.
Meanwhile, the dollar index has fallen by 0.7% for the week so far. It was up by 0.2% on Thursday.
On the other hand, 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.
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.
For Friday, Mr. Ricafort expects the peso to range from P56.50 to P56.70 per dollar. — AMCS with Reuters
