Peso may trade sideways ahead of delayed US economic data
THE PESO is expected to move within a tight band this week as traders wait for a batch of delayed US economic reports following the end of a state shutdown.
It closed at P59.065 a dollar on Friday, 6.5 centavos weaker than Thursday, according to Bankers Association of the Philippines data posted on its website. It was also slightly down from its P59.04 finish a week earlier.
A trader said the peso initially strengthened, touching P58.77, after risk appetite improved when US President Donald J. Trump signed a funding bill restoring government operations. The 43-day shutdown had halted several data releases, leaving investors without economic signals.
Demand for risk assets lifted the peso early on, but sentiment turned after former Party-list Rep. Elizaldy S. Co linked President Ferdinand R. Marcos, Jr. to the flood control scandal, the trader said. That pulled the currency back toward the 59 level.
Mr. Co has accused the President of directing P100 billion worth of projects into the 2025 budget. Malacañang and the Budget department denied the allegation.
The dollar was also supported by cautious remarks from some US Federal Reserve officials, Rizal Commercial Banking Corp. Chief Economist Michael Ricafort said. He noted the peso stayed slightly above the key P59 mark, which had held for more than three years until late October.
He added that political uncertainty, weak foreign investment data and the sharp sell-off in local equities have kept investors guarded. The benchmark stock index fell 2.5% on Friday to its lowest finish in more than five years.
Still, he said seasonal remittance inflows and holiday spending might help temper pressure on the currency as the year winds down. Large foreign-exchange reserves also offer support.
This week, traders will watch for the release of US inflation, retail and labor indicators that were delayed by the shutdown. These reports are expected to guide market expectations for the Fed’s policy path in December.
The trader expects the peso to trade from P58.80 to P59.25 a dollar this week, while Mr. Ricafort projects a range of P58.75 to P59.25. — Aaron Michael C. Sy
