Peso up before US inflation data
THE PESO appreciated against the dollar on Tuesday amid market expectations of easing US inflation for January.
It closed at P55.94, 6.5 centavos stronger than its finish on Monday, Bankers Association of the Philippines data showed.
The peso opened at P56, strengthened to as much as P55.905 and weakened to as much as P56.05 against the greenback. Dollars exchanged rose to $1.26 billion from $947.75 million on Monday.
“The peso appreciated amid potentially softer US consumer inflation due tonight,” a trader said in an e-mail.
US inflation likely eased to 2.9% in January from 3.4% in December, according to economists polled by Reuters. Annual core inflation was also expected to have slowed to 3.7% from 3.9%.
Easing inflation could support rate cuts by the US Federal Reserve later this year, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
The Fed raised borrowing costs by 525 basis points from March 2022 to July 2023 to 5.25-5.5%.
The trader expects the peso to strengthen against the dollar on Wednesday amid hawkish expectations for the Philippine central bank’s policy meeting on Feb. 15.
The trader sees the peso trading between P55.80 and P56.05 a dollar, while Mr. Ricafort expects it at P55.85 to P56.05. — AMCS
