Peso extends climb before inflation report
THE PESO extended its climb against the dollar on Wednesday to hit a near five-week high before the release of Philippine November inflation data.
The local unit closed at P58.23 per dollar on Wednesday, strengthening by 35 centavos from its P58.58 finish on Tuesday, Bankers Association of the Philippines data showed.
This was the peso’s best finish in almost five weeks or since its P58.10-a-dollar close on Oct. 31.
The peso opened Wednesday’s session stronger at P58.485 against the dollar. Its intraday best was its closing level of P58.23, while its worst showing was at P58.50 versus the greenback.
Dollars exchanged rose to $1.72 billion on Wednesday from $1.32 billion on Tuesday.
The peso rose on expectations of faster November inflation, which could affect the Philippine central bank’s policy decision this month, a trader said by phone on Wednesday.
Headline inflation may have picked up in November as prices of key food items rose due to the impact of several typhoons, analysts said.
A BusinessWorld poll of 15 analysts conducted last week yielded a median estimate of 2.5% for the November consumer price index (CPI), within the central bank’s 2.2% to 3% forecast for the month.
If realized, the November print would be slightly faster than the 2.3% clip in October but slower than 4.1% in the same month a year ago.
This would also mark the 12th straight month that headline inflation was within the Bangko Sentral ng Pilipinas’ (BSP) 2-4% annual target.
The BSP expects inflation to average 3.1% this year. In the first 10 months, headline inflation averaged 3.3%.
The Philippine Statistics Authority will release November CPI data on Dec. 5. (Thursday).
The peso was also supported by the seasonal increase in remittances ahead of the holidays, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Thursday, the trader sees the peso moving between P58.20 and P58.50 per dollar, while Mr. Ricafort expects the peso to range from P58.10 to P58.30. — A.M.C. Sy
