Peso rebounds before key data
THE PESO recovered against the dollar on Wednesday as players await the release of key economic data in the United States and at home.
The local unit closed at P57.30 per dollar, strengthening by 21 centavos from its P57.51 finish on Tuesday, Bankers Association of the Philippines data showed.
The peso opened Wednesday’s session flat at P57.51 against the dollar. Its intraday best was at its closing level of P57.30, while its worst showing was at P57.55.
Dollars exchanged dropped to $1.37 billion on Wednesday from $1.92 billion on Tuesday.
The peso rose on profit taking before the release of the latest US jobs reports in the coming days and Philippine August inflation data on Friday, a trader said in a phone interview.
US nonfarm payrolls on Friday will be preceded by data on job openings and private payrolls, offering an update on the labor market that has become the focus of policy debate at the Federal Reserve, Reuters reported.
Markets widely expect the Fed to lower interest rates later this month, pricing in an 89% chance of a 25-basis-point cut.
The dollar edged 0.1% lower at 98.30 against a basket of currencies, having gained 0.66% on Tuesday.
Meanwhile, a BusinessWorld poll of 16 analysts yielded a median estimate of 1.3% for the August consumer price index, picking up from 0.9% in July but slower than the 3.3% clip in August 2024.
If realized, August would mark the sixth month in a row that inflation was below the Bangko Sentral ng Pilipinas’ 2-4% annual target. It would also be within the central bank’s 1-1.8% projection for the month.
The peso was also supported by expectations of a rate cut by the Fed at its policy meeting this month, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For Thursday, the trader sees the peso moving between P57.20 and P57.50, while Mr. Ricafort expects it to range from P57.20 to P57.40. — Aaron Michael C. Sy with Reuters
