Peso sinks to 3-week low before US CPI
THE PESO sank to a three-week low against the dollar on Tuesday before the release of US June consumer inflation data and as markets await developments in countries’ trade talks with the Trump administration.
The local unit closed at P56.73 versus the greenback, weakening by 10 centavos from its P56.63 finish on Monday, Bankers Association of the Philippines data showed. This was the peso’s weakest finish in three weeks or since it closed at P57.16 on June 24.
The peso opened Tuesday’s session weaker at P56.70 against the dollar. Its worst showing was at P56.81, while its intraday best was at P56.675 versus the greenback.
Dollars exchanged rose to $1.28 billion on Tuesday from $1.16 billion on Monday.
“The dollar-peso closed higher as risk-off sentiment caused by the escalating tariff war boosted demand for safe-haven dollar,” a trader said in a phone interview.
Expectations of a faster US consumer price index (CPI) reading for June also supported the greenback, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Wednesday, the trader expects the peso to move between P56.50 and P57 per dollar, while Mr. Ricafort sees it ranging from P56.65 to P56.85.
The dollar hovered just below a three-week high against a basket of currencies on Tuesday, ahead of the release of US inflation data that could give traders a steer on the near-term outlook for interest rates, Reuters reported.
The dollar was little changed at 147.71 yen after earlier rising to the highest since June 23 at 147.89 yen.
The dollar index, which tracks the currency against the yen, euro and four others, eased slightly to 98.003, not far below the overnight peak of 98.136, the highest since June 25.
US Federal Reserve Chair Jerome H. Powell has said he expects inflation to increase this summer as a result of tariffs, which is seen keeping the US central bank on hold until later in the year.
Economists polled by Reuters expect headline inflation to increase to 2.7% on an annual basis, up from 2.4% the prior month. Core inflation is expected to rise to 3% from 2.8%. — Aaron Michael C. Sy with Reuters
