Peso sinks as dollar climbs before US Q3 GDP data
THE PESO sank on Thursday ahead of the release of US gross domestic product (GDP) data for the third quarter and as the dollar rebounded versus other global currencies.
The local currency closed at P56.96 versus the dollar on Thursday, weakening by 11 centavos from its P56.85 finish on Wednesday, data from the Bankers Association of the Philippines’ website showed.
The local unit opened the session weaker at P56.93 against the greenback. Its intraday best was at P56.90, while its weakest showing was at P56.975 versus the dollar.
Dollars traded went up to $1.08 billion on Thursday from $909.7 million on Wednesday.
“The peso weakened ahead of a likely strong third-quarter US GDP growth report overnight,” a trader said in an e-mail.
The US Commerce department was expected to release its estimate for third-quarter GDP overnight.
The peso declined as the dollar was stronger against major global currencies, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The dollar was buoyant on Thursday, hovering at a near three-week high as Treasury yields rose and appetite for riskier currencies dimmed, while the yen briefly surged after breaching 150.50 per dollar, keeping traders jittery about intervention, Reuters reported.
“Nevertheless, the peso exchange rate still somewhat stabilized and supported versus the dollar on possible intervention towards the P56.99 high, as signaled and reiterated by some local monetary authorities since August 2023… in an effort to stabilize the peso exchange rate,” Mr. Ricafort said.
For Friday, the peso may recover after the Bangko Sentral ng Pilipinas’ (BSP) off-cycle hike announced on Thursday, the trader said.
The BSP on Thursday hiked its policy rate by 25 basis points (bps) to 6.5% in an off-cycle move in a bid to anchor inflation expectations.
This was the BSP’s first policy adjustment since March and brought total increases since May 2022 to 350 bps.
For Friday, Mr. Ricafort sees the peso moving between P56.80 and P56.98, while the trader gave a forecast range of P56.70 to P56.90. — L.M.J.C. Jocson with Reuters
