Peso inches up as market eyes US elections
THE PESO inched up against the dollar on Tuesday as the market remained cautious ahead of the US election result.
The local unit closed at P58.315 per dollar on Tuesday, strengthening by 2.5 centavos from its P58.34 finish on Monday, Bankers Association of the Philippines data showed.
The peso opened Tuesday’s session weaker at P58.43 against the dollar. Its intraday best was at P58.30, while it dropped to as low as P58.455 versus the greenback during the session.
Dollars exchanged went down to $1.15 billion on Tuesday from $1.18 billion on Monday.
“The dollar-peso saw mostly sideways trading ahead of the results of the US presidential elections,” a trader said by phone.
The dollar softened on Tuesday as traders squared positions ahead of what is expected to be a close US presidential election, while options volatility soared after recent polls dented some market bets on a victory for Republican Donald Trump, Reuters reported.
Democrat Kamala Harris has also experienced improving odds on election gambling sites and had a slight lead on PredictIt overnight, although Polymarket continued to show Mr. Trump as favorite.
In recent weeks, financial markets and some betting platforms had leaned strongly in favor of a win for Mr. Trump, whose tariff and immigration policies are considered inflationary by analysts, leading to a rise in US Treasury yields and gains for the dollar.
The US currency took a knock on Monday after a weekend opinion poll showed Ms. Harris with a surprise lead in Iowa, a traditional Republican stronghold. Overall, polls continue to show a tight race.
With hours to go until the first results were set to emerge overnight, the dollar was mostly flat against a basket of currencies.
Complicating the picture even more for traders this week is the Federal Reserve’s policy meeting on Thursday, at which the US central bank is expected to cut interest rates by a quarter point.
The peso was also supported by data released on Tuesday showing that inflation remained within the central bank’s target last month, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Headline inflation picked up to 2.3% in October from 1.9% in September, the Philippine Statistics Authority reported on Tuesday.
Still, this was slower than the 4.9% print in the same month last year. This was also within the Bangko Sentral ng Pilipinas’ (BSP) 2%-2.8% forecast for the month and a tad below the 2.4% median estimate in a BusinessWorld poll of 11 analysts.
For the first 10 months, the consumer price index averaged 3.3%, well within the BSP’s 2-4% target for the year but above its 3.1% baseline forecast.
For Wednesday, the trader sees the peso moving between P58.10 and P58.50 per dollar, while Mr. Ricafort said it could range from P58.20 to P58.40. — A.M.C. Sy with Reuters
